A Pharmacist’s Guide To: Structuring Loans And Financing

This article first appeared in The Capsule, a publication of Pharmacists Manitoba.

Whether buying, expanding or selling a pharmacy, financing goes far beyond the amount borrowed or the interest rate – it can be a deciding factor in whether a pharmacy transaction succeeds or fails. Those undertaking a pharmacy transaction must answer questions such as: Who or what entity is borrowing the money; what assets are available for a lender to take as security; whether anyone is personally responsible for the loan; and what restrictions the loan places on the business.

These questions are particularly important for pharmacies given their regulated nature. In Manitoba, The Pharmaceutical Act (Manitoba) sets out that a pharmacy may only be established or operated under a pharmacy license. The Pharmaceutical Act also requires disclosure concerning the ownership of the pharmacy and, where the applicant is a corporation, the applicant must disclose its legal and beneficial shareholders, officers