SBA/Other LT Capital to Acquire/Start a Pharmacy

As Rite Aid and other national chain store pharmacies close down, it creates an opportunity for independent pharmacies to either acquire these stores or their prescription files. This can easily and effectively be done with an SBA 7a loan. HealthGrowth Capital is one of the largest arrangers and facilitators of SBA loans in the independent pharmacy industry.

These are the steps a pharmacy owner needs to take to obtain a SBA 7a loan to acquire a closing pharmacy or its patient files:

    • Verify SBA 7(a) Requirements:

      • Your pharmacy must operate for profit in the U.S., meet SBA size standards, and demonstrate creditworthiness.

      • You must show the inability to secure reasonable credit elsewhere.

    • HealthGrowth Capital Criteria:

      • For their PharmLine SBA Bolt Loan, you typically need:

        • Credit score ≥700.

        • At least 2 years in business.

        • A clear plan for using funds (e.g., purchasing prescription files or acquiring a store).

  • Gather the following documents to streamline the application process:

    • Business Financials:

      • 3 years of business tax returns.

      • Year-to-date balance sheet and profit/loss statements.

      • Debt schedule (existing business liabilities).

    • Personal Financials:

      • Personal tax returns (past 3 years).

      • Personal financial statement (SBA Form 413).

    • Acquisition-Specific Documents:

      • Letter of Intent (LOI) or Purchase Agreement with the seller.

      • Pharmacy questionnaire and seller’s financial records.

      • Business plan with 3-year projections (for startups).

    • Apply Online: Complete HealthGrowth’s simplified application form (name, pharmacy details, contact info).

    • Partner Coordination: HealthGrowth works with lenders like CreditBench and Kapitus to match your needs:

      • For loans under $150,000: CreditBench facilitates SBA-backed loans with a ~14-day approval timeline.

      • For larger loans ($50,000–$5.5M): HealthGrowth coordinates with SBA-approved lenders.

    • Collateral Requirements:

      • SBA 7(a) loans accept prescription files and goodwill as collateral, secured by cash flow rather than hard assets.

      • Personal guarantees from owners are typically required.

    • Terms:

      • Interest Rates: Capped at prime rate + 2.75%.

      • Repayment: Up to 10 years for working capital, 25 years for real estate.

    • Lender Submission: HealthGrowth or its partners submit the application to an SBA-approved lender.

    • Closing Process:

      • Takes 45–60 days for due diligence (appraisals, title work, inspections).

      • Pay SBA guarantee fees (0.25%–3.75% of the loan amount).

      • Sign loan agreements and disburse funds.

    • Use funds exclusively for the approved purpose (e.g., acquiring prescription files or real estate).

    • Maintain records for SBA audits and adhere to reporting requirements.

Why HealthGrowth Capital?

  • Specialized Expertise: Focuses on independent pharmacies, addressing DIR fee cash-flow gaps and growth needs.

  • Speed: Non-SBA products fund in days; SBA loans close in weeks.

  • Flexibility: Loans up to $5.0M with competitive terms, even for businesses with uneven profitability.

By leveraging HealthGrowth Capital’s network and the SBA 7(a) program, independent pharmacies can efficiently capitalize on chain pharmacy closures to expand their market presence.