Financing your first pharmacy can seem a daunting task so here are some practical tips to assist you navigate the process seamlessly. You will be dealing with numerous advisors, such as solicitors, landlords, accountants, and vendors. Ensuring you promptly complete the tasks within your control is important to keep the transaction momentum moving forward.
These tips should act as a guide to ensure your finance moves along concurrently with other key phases in the transaction such as, due diligence, contracts, and authority applications.
In the coming weeks we will be covering nine tips in a series of articles. This article covers tips one to three.
1. Engage the right team of professional advisors
Tip number 1 is all about having the right advice to get out of the blocks quickly. We always recommend that our clients have their advisors ready from the outset. Importantly, this gives you the time to make an informed decision on who you would like to use rather than making a rushed choice after an offer has been made. We also recommend using truly independent advisors to ensure you receive independent advice. Specifically, your solicitor and accountant. An independent accountant or solicitor will provide you honest advice on all things relating to your purchase, from due diligence to contract related items. Both advisors play a vital role in bringing your purchase to life, as well as protecting your interests. Crucially, an accountant will ensure your operating entity is set up in line with relevant industry regulations.
For recommendations feel free to contact us, we’re happy to introduce you to some of the trusted advisors we work with.
2. Develop your target criteria
Developing a target criteria is key to successfully navigating your way to settlement and the ongoing success of your pharmacy. There are numerous pharmacy models ranging from Discount and Community to Nursing Home and Hospital. Taking it one step further, you can narrow down a preference of shopping centre, single pharmacy town, or a main strip shop.
Your application to a respective lender should include and highlight your key strengths and experiences which make you a quality candidate to lend money to. As such, spending time to work out what pharmacy model suits your industry experience is an important step and one that helps you reach your end goal of achieving pharmacy ownership.
3. Know your budget
It starts here. Know your budget and you can submit offers with confidence. The easiest way to ascertain this information is by speaking to an industry broker like myself who can work through your personal situation, future goals and provide an accurate borrowing capacity assessment. We can help you determine what your purchasing range is, and what is required to settle at that level. Key information includes, ongoing repayment commitments, knowing your deposit requirements, transaction costs and any stamp duty which can be applicable on business purchases in some states.
Pharmacy lending is a unique space. Understanding the policy parameters, lending landscape and key banker contacts is mission critical. Presenting your application in the right way, to the right people, is paramount – you do not get a second chance to create a first impression with the banks. Seeking out an industry finance broker to facilitate your pharmacy loan will give you a greater chance of obtaining an appropriate loan for your circumstances, while ensuring it is done in a timely manner.
Written by Matthew Edginton, Finance Broker – AP Group
AP Group are the leading pharmacy experts in Australia and specialise in helping first time buyers find the right pharmacy and secure the finance to support their purchase.
We connect existing owners with over 5000 ready and eager investors via our cutting-edge online Data Room. Our Data Room keeps confidential listing data secure and allows buyers to make informed decisions on each of our pharmacies for sale.
AP Group have built connections with all the major banks and a host of smaller lenders, ensuring that first time pharmacy buyers find a better deal.
About the Author:
Matt is a solutions guy. Whether it’s training his two sausage dogs (Sassy and Lenny), learning different plant varieties, or helping his clients with complex lending — he enjoys being presented with a challenge and finding ways to overcome it. His finance journey began in 2018 when he moved to Melbourne from Adelaide (some might also say this was for better access to AFL).
Before joining AP Group, Matt trained as a mortgage broker with one of the largest construction finance brokers in the state. He worked closely with several experts in the field – setting him up with the knowledge, experience and skillset he has today.
For Matt, he loves the combination of complex finance work and giving excellent customer service. He’s personable, dedicated and responsive, working tirelessly to find finance solutions to help you achieve your goals.