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📅 Last Updated: April 3, 2023
✏️ Written By Chrissy Kapralos
🕵️ Fact-Checked by Caitlin Wood
Business Loans Pharmacy

If you’re a trained pharmacist or you manage an independent pharmacy, then you know that professionalism and selling the right products are keys to success. However, like with any self-sustained business, the right type of financing is also essential. After all, you want to keep your pharmacy up and running smoothly.

With the right business loan, you can not only keep your pharmacy in top shape, your regular expenses will never be a problem again. Hire the right staff, pay the utilities, purchase all the pharmaceutical products you need. No cost is out of reach when you have the right business loan on your side. The good news is, we can help you reach your goals and expand and grow your business by matching you with a great lender who meets all your needs.

How do You Apply For a Business Loan

Even with experience in the pharmaceutical industry, starting up your own pharmacy is a large endeavour. Buying out a retiring business could cost a couple hundred thousand dollars, at the least. With the right business loan, however, you can get the financing you need to start your pharmacy business. First, you need to consider everything that your lender will be looking at:

Personal and Business Credit Score

Your personal and business credit score are not identical. Lenders will want to see both before lending to you; however, some lenders might consider omitting a credit score from their requirements in favour of a higher interest rate or collateral, for example. 


Assets include property, cars, jewellery, and other high-value items. Or, if you already have an established business, equipment or vehicles can act as an asset. Sometimes, lenders will ask for an asset to be used as collateral in case you default on the loan. 


Any sort of debt, including credit card debt, mortgages, student loans, and lines of credit will be examined by your lender. 

Time in Business

If you already started your pharmacy business and are looking for a loan to keep you afloat, your lender will want to know how long you have been in business, and whether or not you have consistent sales and customers. It also doesn’t hurt to have some experience in management, as well as in the pharmaceutical industry. For example, if you worked in a pharmacy for the last ten years, even if for someone else, a lender can reasonably assume that you are knowledgeable about the pharmacy business. 

You also need to ensure you have all your paperwork in order, as lenders will need some key documents from you before deciding to lend:

Business Plan

A business plan documents your company’s financial goals, business aspirations, and timelines for accomplishing them. With the right business plan, you can keep a steady vision of where you want to see your business in the next few years, and stay on track in getting there. Lenders like to see business plans because they demonstrate financial goals and how a business will reach them. 

Financial Documents

Your lender will almost certainly require the following documents to assess your finances:

Business Licence and Registration

Depending on the city you’re operating in, there are municipal requirements and applications to register and licence your business. For example, Toronto businesses need to have specific zoning, sign permits, HST registration, and more. 

The requirements are even more extensive for pharmacies. For example, in Ontario, you need to be accredited by the Ontario College of Pharmacists before opening a pharmacy. 

Business Financing Providers in Canada

AmountAPRTerm (months)
SharpShooter Funding1k-300kFee-Based: Starting at 9%12- 60 Learn more
OnDeck5k-300k8% – 29% 6-18Learn more
Lending Loop1k-500k+5.9%3-60Learn more
Thinking CapitalUp to 300k8%-22%6-12 Learn more
Merchant Growth5k-500k-6-18Learn more
BDC100K +6.05% +60Learn more
IOU Financial5K-100k15%+12-18Learn more

Cost of Financing Your Pharmacy With a Business Loan

Once a lender approves your loan application, you can expect to pay more than the principal. 


Considering the APR of your loan is important in assessing your interest rate. Your APR, or annual percentage rate, is an accurate way to see what your interest payments will look like. Just divide your APR by 12 to find out how much you’ll be paying every month in interest. Business loans can range from having anywhere between 5% and 40% interest rates. 

Term Length

Your business might benefit from a longer-term length since the principal payments will be lower; however, longer loan terms mean more interest paid in the long run. 


Business loans often have fees that may not be obvious in the beginning. For example, some loans have early payment fees, which occur if you pay the loan too fast. This is because the lender loses out on potential interest payments already agreed to on your contract. There may also be fees associated with late payments, as well as general administrative fees or loan origination fees

What Can Use a Good Business Loan For?

Since there are numerous other expenses to consider when managing a business of any kind, there are surely other ways you can put a business loan to good use, including but certainly not limited to:

  • Leasing or building a larger private space, or purchasing a franchise location
  • Hiring a licensed contractor to oversee any renovations and make sure the space is up to code
  • Paying for a full property/safety inspection
  • Getting the required business and medical product distribution licenses
  • Stocking your shelves with a wide variety of products and supplies
  • Hiring qualified staff for all areas (pharmacists, lab technicians, customer service personnel, managers, etc.)
  • Buying proper work attire for your staff (lab coats, smocks, name tags, etc.)
  • Buying a surplus of necessary laboratory supplies (disposable gloves/masks, safety glasses, bottles, applicators, etc.)
  • Buying the right lab equipment (pill counters, blenders, grinders, etc.)     
  • Building stylish, multi-section service counters (customer service/cash, prescription pick-up/cash, post office outlet, etc.)
  • Buying/building enough large shelving units for all your items
  • Installing automatic doors and wheelchair access for clients with limited mobility
  • Buying/installing a personal blood pressure monitor
  • Hiring a design company to fabricate indoor/outdoor signage (business name, product sections, laboratory/prescription pick-up, etc.)

Business Financing For Any Industry

Own a business in another industry? Click here

More Ways To Finance Your Pharmacy

If you are finding it difficult to acquire approval for a business loan, there are a few other avenues you can try to get your financing:

Merchant Cash Advance

A merchant cash advance is an advance of payment, usually a lump sum, given to a business with future sales as the assumed method of repayment. This can be a great loan option for a pharmacy business, as a lot of money is needed upfront and the products are priced high. 

Business Line of Credit

A business line of credit allows a borrower to access funds (up to an agreed-upon limit) and only pay interest on the amount used. The borrower can pay back the funds, and use them again as they please. This sort of loan is great for unexpected expenses and cash flow shortages. Business lines of credit can be used for every sort of expense, from marketing, advertising, maintenance, and labour. 

Equipment Loan 

Pharmacies require a lot of safety equipment to operate. Although the equipment is smaller than those of a business for construction or fitness, an equipment loan can help offset the initial costs of pharmaceutical equipment. Some examples of equipment include:

  • Personal Protective Equipment (gloves, masks, etc.)
  • Flasks and beakers
  • Mortar and pestle
  • Cash register
  • File Management Database
  • Autoclave

Equipment loans are backed by the equipment themselves. So, in the event that you default on the loan, the lender will simply take the equipment that you bought. 

Business Financing FAQs

Should I use a business loan or an equipment loan to finance my pharmacy? 

Equipment loans work best for businesses that have to invest a lot of money upfront on equipment. Business loans offer more flexibility in how a business can spend the loan. Pharmacies require some equipment, but their costs are higher in supplying their products, specifically drugs and medication, which likely wouldn’t be accepted as collateral for an equipment loan. A business loan would be more suitable for a pharmacy because their expenses will be more varied than simply equipment. 

How do I ensure I qualify for a low business loan rate?

  To heighten your chances of acquiring a low business loan rate, there are a few measures you can take: Compare rates – Don’t just accept the rate given to you by a lender. There are many lenders out there with varying offerings, and it’s good practice to evaluate what’s out there before committing to one contract. Being more aware of the lending market can also help you negotiate your rate in some cases.  Improve credit – A task done over time, improving your credit can sometimes help you acquire a lower loan rate.  Reduce debt – Secure the loan with an asset – Using an asset as collateral, such as property or an expensive car, can help offset the high-interest rate. In these cases though, you will need to accept the possibility of losing your asset in the event that you default on your business loan. 

How fast can I get a business loan to start my pharmacy business?

Depending on your lender, it can take anywhere between one week to three months to be approved for a business loan. Alternative lenders tend to approve faster, while banks can take more time.

Get The Loan You Need to Succeed

Having the right loan with the right terms is truly one of the cover stones of a successful business. Fill out an application today and put your plans into action.

Caitlin Wood Priyanka Correia Lisa Rennie Bryan Daly Cris Ravazzano Margaret Johnson Kale Havervold Liz Enriquez Sean Cooper Veronica Ott Corrina Murdoch Chrissy Kapralos

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