Financing Nevada Pharmacy Franchises

By Brad MacLiver
Authorship and profile at Google


A NV pharmacy franchise is a contractual relationship between two parties. One, the Pharmacy Franchisor is the party that developed their drug store business model, branded the pharmacy related products, and produced the system the pharmacy franchisees will operate under. The second party, the Pharmacy Franchisee, purchases a franchise license from the Nevada Pharmacy Franchisor, and usually pays an ongoing pharmacy franchise fee, or royalty fees, to use the name, products, systems, trade secrets, etc., created by the Pharmacy Franchisor.

When financing a pharmacy franchise or business, there quite a few options available. All pharmacy franchise funding sources, for drug stores, prefer lending to a pharmacy franchisee who will be working with a nationally recognized name and long track records. Newer pharmacy franchise models in Nevada won’t possess these two traits and will be considered more risky.

Traditional Bank Financing used in funding a pharmacy franchise is available when a pharmacy franchise has the track record and pharmacy name recognition. Many of the banks will show interest in this type of funding opportunity. Unfortunately once the bank reviews the loan documents, many of these banks decline the funding request because they don’t understand the security provided for the pharmacy loan. Community drug stores traditionally have very little in the way of traditional assets to offer as security. Lenders for  Nevada pharmacies will, however, use traditional methods for analyzing the cash flow available to service debt, so they will also need to understand that more nontraditional collateral will secure the loan.

As a borrower, even when incorporated, the independent drug store owner’s personal credit rating will be a factor, along with personal tax returns, and financial statements. The amount of actual cash on hand and the verification of the source of the down payment will be critical factor in qualifying for a pharmacy business loan.

NV Pharmacy Franchise Funding Tips:

1. Because there are quite a few pharmacy franchise financing options to choose from, pharmacy owners in Nevada should perform proper due diligence then obtain the pharmacy funding that best suits their situation.

2. Have an accountant or attorney that is acquainted with pharmacy franchise financing to review the pharmacy business loan documents.

3. There are NV pharmacy consulting services and franchise associations who can help guide a prospective pharmacy franchisee or borrower or a drug store loan.

4. New pharmacy owners need to make sure their funding request is enough to get the Nevada pharmacy running and profitable. Less than ample funding for the initial stages may put the drug store in a position of needing additional funding. Smaller working capital loans that would be in a subordinated position will be more difficult to obtain at a later date.

When pharmacy owners have questions and need information regarding pharmacy franchise business loans, or any types of funding for community drug stores and pharmacies, they should contact a NV pharmacy industry specialist who can provide quality answers and sound advice.

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