Financing Pharmacy Purchases Through a Commercial Mortgage
Demand for both NHS and private prescription medications remains high, and although the business case for these enterprises might look somewhat different, there are often advantageous mortgage brokers available.
The key to achieving optimal commercial mortgages rates for pharmacies is to tailor your mortgage agreement to your objectives, for example:
- Do you need a commercial mortgage to buy out a retiring owner and finance the full business acquisition?
- Are you an established pharmacist and want to purchase a second property to expand your company into a new area?
- Is the commercial mortgage part of a business strategy to invest in a new trading location, perhaps purchasing a premise that needs renovation work?
- Do you wish to remortgage an existing loan secured against a commercial pharmacy practice or buy a property to launch a brand new medical services company?
- Are you an experienced pharmacist or a new practitioner?
Lender Criteria to Compare Financing for Pharmacy Businesses
Clarifying your aims is important since, with thousands of commercial mortgages for pharmacies out there, you could potentially save thousands with expert guidance.
For example, a lender that doesn’t specialise in medical sector applicants might offer commercial mortgage rates on the same rates as any other low-risk business mortgage - but you might need a sizable deposit and a good credit rating to be eligible.
Niche lenders focusing on specific types of commercial mortgage may have favourable interest rates and heavily competitive terms that are a much better prospect for your business.
Likewise, a new business is inherently riskier, so it makes sense to ensure you avoid unnecessary delays and cost applying for a commercial mortgage for pharmacies through a lender that requires a minimum trading history.
This stage is where an accomplished broker steps in, analysing your circumstances, scouring the breadth of the market for the most suitable deals, and structuring your commercial mortgage application to optimise your chances of approval.
How to Finance a Pharmacy With the Best Commercial Mortgage Deal
Pharmacies are an integral part of the framework of medical care and a business that poses a low-risk exposure level to commercial mortgage lenders.
As the pharmaceutical sector evolves, lending is influenced by:
- Changes associated with NHS contracts and public sector funding provision.
- Additional pharmacy services, strengthening the business plan - such as immunisations, walk-in clinics and 24-hour dispensing services.
- Trading history, with pharmacies in prominent city-centre locations or proximity to hospitals and clinics providing the greatest stability.
Therefore, it remains paramount to compare the commercial mortgages for pharmacies before applying since the interest rates available will vary widely.
Lenders will assess each application on a case-by-case basis before making an offer, so the stronger your application, the less your commercial mortgage will cost your pharmacy business.
As commercial mortgages become more prevalent and high street banks weigh in on this unregulated market, it has never been a better time to work with an independent, experienced broker such as the Revolution Brokers team.
The best commercial mortgages for pharmacies are often available from specialist lenders, which don't offer products to the general public and negotiate terms directly within their network of approved brokers.
How to Choose a Lender for Financing a Pharmacy Purchase
Ultimately, whichever commercial mortgage you choose needs to fit within your cash flow forecasting, and long-term business aims.
Commercial mortgages can run upwards of 40 years, so it's essential to research your mortgage options thoroughly before making this financial commitment.
Revolution Brokers provides a bespoke service to support each client, from their initial inquiry to final mortgage completion.
Why Pharmacy Finance Brokers are Advisable
Our consultants take the time to get to know you, your business, and what you require from your commercial mortgage, identifying:
- Which lenders are correctly suited to your commercial mortgage needs?
- Where will you find the best possible terms - including flexible repayment policies, low arrangement fees and conditions of lending?
- Which commercial borrowing products align with your plans, whether you're buying a building, a business, or an investment project?
We can also provide structured guidance in unique circumstances to help you make fast financing decisions.
For example, suppose you wish to quickly finance a commercial mortgage for a pharmacy to buy out a business for sale. In that case, a bridging loan or development mortgage might help shore up your business plans.
How Does Pharmacy Finance Work?
As we've explored, multiple variables will influence the type of commercial mortgage we recommend and what sort of rates and charges you can expect to pay.
Below we've listed some of the typical terms you'll find attached to commercial mortgages for pharmacies to give you an idea of what to expect.
- Loan to Value (LTV) - the LTV is the amount you're borrowing against the property or business value. Most commercial lenders will require a deposit of around 20% (lower than the standard for commercial borrowing). However, you could borrow up to 100% depending on the nature of the borrowing product and the security available.
- Terms - pharmacy businesses applying for a commercial mortgage to buy a property will often find that the terms start at around 25 years, similar to a residential mortgage. If you need a shorter-term loan or a long-term mortgage, a broker can negotiate this with your selected lender.
- Flexible lending - commercial mortgages for medical sector companies buying an existing business, or using the financing to achieve a trading aim, will typically find that shorter terms from 15 years are available.
Of course, these are very rough indications, and the exact rates, LTV and mortgage terms you are offered will depend on your application circumstances.
Expert Support to Choose Competitive Financing for Pharmacy Mortgages
If you're looking for a mortgage against a commercial medical company, a specialist broker with experience in the market will ensure you get the best possible deals.
Revolution works with thousands of businesses, offering independent advice and access to all the commercial mortgages and lenders available on the market.
For help and advice structuring your commercial mortgage application, please get in touch with us on 0330 304 3040 or email the team at [email protected].
