Calling All Individual Pharmacies - Asset Finance Could Be The Solution

Posted by Emma Robison on Aug 30, 2019 4:50:51 PM
Emma Robison
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Even though community pharmacy funding escaped the government’s proposed £33m budget reduction for 2018/2019, pharmacists are naturally dismayed that it has not been increased. Past history of austerity measures indicates that cuts may well come sooner rather than later. Uncertainty has made many community pharmacies look to private sources of funding to acquire the modern assets required for growth. These include cash loans from banks and other providers. Depending on what the funds are needed for, asset finance may be a more accessible and cost-effective alternative.

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Bank Funding

Often operating on tight margins, many pharmacies find business expansion and investment plans difficult to justify to banks. It may become impossible if NHS Prescription Pricing for community pharmacies is eventually trimmed. Even standing still may be a challenge for many. The solution lies modernising the pharmacy to increase throughput, and to diversify inventory and services to reduce reliance on NHS contracts.


Investing In Automation

Pharmacies are becoming increasingly streamlined and automated thanks to a new generation of pharmacy robots. These allow fast and accurate processing of NHS prescriptions, saving time and reducing the administrative burden on staff. These assets don’t come cheap, but are readily available through asset finance, an accessible and flexible form of finance that lets pharmacies spread the cost of their equipment without large cash outlay or having to pledge property as collateral.


How Asset Finance Benefits Pharmacies

Specialist asset finance providers understand the medical service sector and its challenges. Typically they will look at the NHS spend when assessing the merits of an application. They also take into account potential resale value of the asset should the agreement fall through before the end of term. This being said, asset finance is a superior choice over a business loan for several reasons:

  • Funding is secured by the asset – no further security required
  • A fixed monthly payment from cashflow makes planning transparent
  • Personal guarantees are not usually required
  • Start-up pharmacies will be considered when backed by a strong business plan and customer base
  • Poor or insufficient credit history is not necessarily a block
  • Assets can be paid for over a longer period than a conventional loan
  • Small upfront pre-payment of one or more instalments secures a medium term package
  • Providers are very flexible as regards terms in a highly competitive market


Find Out More About Asset Finance

We have written the Asset Finance Guide for you to download. Discover more about how asset finance works and how you can tap into this source of funding to build your pharmacy business.

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Download the FREE Asset Finance Guide Today.

 

Topics: Asset Finance

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