How to Get a Pharmacy Loan in New York

Owning a pharmacy business can be rewarding, allowing you to contribute to the wellness and healthcare of your community while generating income of your own. When starting a new pharmacy business in a state like New York, you may find that a loan gives you access to much-needed funds to purchase and build out a storefront, purchase supplies, buy equipment, market and advertise, or even hire employees.

Pharmacy loans in New York can allow you to open a new pharmacy, expand your current business, and even acquire an existing pharmacy. Here’s everything you need to know about taking out a pharmacy loan in the Empire States, what's required and how long it takes to get funding.

Types of Pharmacy Loans Available in New York

There are a few different types of loans that business owners can use when opening an independent pharmacy. Here are a few of the most common pharmacy financing options to consider when you're looking to buy commercial real estate, finishing out a building, purchasing an existing pharmacy business, hiring employees, and more.

SBA Loans

One popular small business loan option for a pharmacy is the SBA loan program. These loans are available through individual lenders but are backed by the Small Business Administration (SBA), because of this, SBA loans tend to have lower interest rates, longer repayment terms, and higher borrowing amounts compared to other loan programs.

Whether you need $500 or up to $5.5 million, SBA loan funding in New York can get you cash for fixed assets or working capital. You can choose from an SBA 7(a) loan or SBA 504 loan, depending on your needs and eligibility criteria, but the approval process for SBA financing can be a bit daunting; it may take weeks (if not months) to get funds in hand, so be sure to plan accordingly. You may also be required to offer a down payment on your SBA loan.

Traditional Bank Loans

Many pharmacy owners will use traditional business loans or a business line of credit to fund their community pharmacy. These business loans are offered by banks, credit unions, and specialized business lenders, with eligibility based on your business credit score (and sometimes personal credit score), business financial history, and sometimes the collateral available to secure the debt.

As credit history is a big factor, it may be more difficult for startups and new pharmacists to get these traditional bank pharmacy loans in New York. Even if you can qualify, you may be asked to provide a personal guarantee or collateral or even accept more limited terms than if you had a lengthy business history and high credit score.

Traditional funding might also include real estate loans, which you could use to purchase your pharmacy building, pay for an existing pharmacy acquisition, or even refinance your business down the line. These commercial mortgage loans in NYC work similarly to personal mortgage loans: You’ll pay interest on the lump sum amount borrowed, make set monthly payments over a specific period, and will usually need to provide a down payment on the purchase.

Non-Traditional Lenders

Online business lenders are another pharmacy lending source to consider. These alternative lenders can be ideal for business owners with limited credit or a shorter business history, as their eligibility requirements can be easier to meet. Since many non-traditional lenders operate mostly (or entirely) online, it’s also easy to submit a loan application and finalize your loan at any time or even on the go.

These loans can sometimes have higher interest rates and shorter loan terms than more traditional lenders offer, leading to bigger monthly payments or a higher overall cost. Be sure to read your disclosures carefully to understand exactly what you’ll pay in interest, what your monthly payment will be, and any applicable fees attached to the loan.

Equipment Financing Loans

If you’re looking at purchasing equipment for your pharmacy, an equipment loan might be the best option. These loans can be used to purchase medical equipment and other forms of pharmacy technology. The debt is often secured by the asset itself, so you may find it easier to qualify for these loans and/or lock in more favorable borrowing terms.

Not all pharmacies require significant equipment investments, so this type of loan doesn’t always make sense. However, if you need to purchase large coolers and refrigerators for medications, point-of-sale (POS) systems, automated dispensing systems, prescription verification systems, surveillance and security gear, shelving, and more, equipment financing in New York could be the right choice.

Working Capital Loans

If you find yourself in a cash flow pinch or just need a pharmacy business loan to help, get the ball rolling on your new business, working capital loans can help. These short-term loans offer quick funding for operational costs like inventory, payroll, and marketing. You won’t have as long to repay the debt as a more traditional loan, but funding is often faster.

Key Considerations When Applying for Pharmacy Loans

If you’re looking to open a new pharmacy or support an existing business, you might find it challenging to get loan financing in New York. Do your best to prepare all documentation and boost your credit before applying if you want to improve your approval odds.

Business Plan and Financials

Whether you’re a brand-new community pharmacist or are looking to expand your existing company, having a solid business plan is the first important step. This plan can be used to show how you expect your business to perform in your area, how you’ll use your loan funds, and what your short- and long-term plans are for the company.

If you’ve already been in business for a period, lenders will often want to see balance sheets, profit & loss (P&L) statements, bank statements, and previous years’ tax returns. These all help you demonstrate financial stability and improve your chances of loan approval.

Creditworthiness

Both your business and personal credit scores can affect loan approval. This credit history will show lenders how you’ve managed debt in the past, whether it’s paying your loans on time or maintaining a healthy credit card balance. If you don’t yet have a strong business credit history, expect your personal credit score to weigh even more heavily.

To boost your credit scores, be sure to pay bills on time every single month, don’t carry over balances if you can avoid it, utilize a healthy mix of credit (holding both credit cards and personal or student loans, for example), and maintain as low a credit utilization as possible.

Loan Amount and Repayment Terms

Before you start applying for pharmacy loans in New York, spend some time figuring out what you actually need for your business. The right loan amount will depend on how you’re using the money, what you can qualify for, and what you can afford to repay each month on the debt.

Be sure to take your loan’s repayment terms and interest rates into account here, as that will impact your overall loan costs and monthly payment requirements. If you’re taking out an SBA loan or other pharmacy loan that requires a down payment, be sure to calculate what you can afford to contribute upfront.

Collateral Requirements

Depending on your creditworthiness, the type of loan you’re taking out, and what you plan to buy, you may be required to offer collateral to secure the debt.

Collateral is especially common when purchasing real estate or large equipment. If you can’t qualify for an unsecured business loan, you may also need to use these types of assets to secure a loan, even if you plan to spend the funds on operating expenses or things like payroll. If you fail to pay your loan as agreed, the lender can take that asset to cover the debt.

How to Find the Right Pharmacy Loan in New York

Now that you know what sort of pharmacy loan you need and how much you can afford to borrow, it’s time to shop around for the right loan for you.

Research Lenders

There are many different types of lenders, depending on how you prefer to borrow and what you need most from your pharmacy loan. New York borrowers will want to consider:

• How fast do they need funds
• How will the cash be used (purchasing equipment, buying an existing business, refinancing debt, covering cash flow shortages, etc.)
• Whether they’ll qualify for a traditional loan
• How good their business and/or personal credit score is
• How much they need to borrow
• Whether they prefer an in-person or online experience

No matter which lender you choose, be sure to read all disclaimers and disclosures before signing your loan documents. If you have questions about your loan terms, fees, down payment requirements, repayment schedule, or anything else, be sure to ask your lender upfront.

Utilize Local Resources

Business owners in New York have many state and local programs and initiatives available that support small businesses and new business development. Be sure to check first whether any of these resources would be valuable to you; you might even qualify for potential grants or low-interest loan programs from the state.

Some places to begin your search include the New York State Small Business Development Center and Empire State Development.

Final Thoughts on Pharmacy Loans in New York

Pharmacy loans can help New York business owners get the funds they need to start a new pharmacy, purchase a current business, buy inventory and equipment, hire employees, expand their company, and more. These healthcare-adjacent loans are offered through traditional banks and credit unions, online lenders, and other alternative lenders, though grants and state programs may also be available. To find the right pharmacy loan, New York business owners should first consider their business needs as well as their personal and business credit rating, monthly budget, and available savings.

FAQs on Pharmacy Loans in New York

What do I need to apply for a New York pharmacy loan?

The pharmacy loan application process may vary from one lender to the next, but usually involves providing information about you, your business, and your financial situation. Lenders will want to know how much you plan to borrow, when you can repay the debt, how you’ll use the money, and what your company’s current financial situation is like. If you’re starting a new pharmacy, you may be asked for your business plan and a personal guarantee, since you don’t yet have any business credit history established.

Do I need collateral for a pharmacy loan in New York?

You may need to provide collateral to secure a pharmacy loan if you don’t have adequate business and/or personal credit history. Collateral is also common with forms of secured business debt, such as equipment and real estate loans.

How long does it take to get a pharmacy loan?

Some lenders may approve business loans and disburse funds quickly, while other funding options, such as SBA loans, could take weeks or even months to complete. How long it takes you to get your pharmacy loans depends on your eligibility, how much you’re looking to borrow, and how the funds will be used, among other factors.

Can I use a pharmacy loan to consolidate debt?

An unsecured pharmacy loan could be used for business debt consolidation in some cases. If you have existing business loans, business credit card debt, or other outstanding balances, a new pharmacy loan may help you simplify repayment, lower interest rates, adjust your monthly payment, or all the above.

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