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Acquisition FinanceTopic Headings:
Initial ConsiderationsAs per any business transaction, there a number of key points to consider in determining whether Pharmacy ownership is for you. This is particularly the case for your first purchase, and your Professional Advisors should discuss the following with you prior to any purchase:
Ownership Structures and Restrictions There are a number of types of ownership structures that will enable you to purchase a Pharmacy:
When deciding on the ownership structure for you, you should always consider the ownership restrictions that exist in Australia. Set by each of the State Pharmacy Boards, these restrict who can own a Pharmacy, stipulate geographic restrictions on where Pharmacies can be located, and detail the number of Pharmacies that can be owned. Location and Type of Pharmacy to Purchase No two Pharmacies are the same, and you should always decide on the following:
Planning Your PurchaseOnce you have made the decision you are ready to Purchase your Pharmacy, your Sigma Representative can assist with finding the ideal Pharmacy for your circumstances. They will consider the amount of Equity you need to contribute to the purchase, along with the demographics of your desired purchase (location, type of Pharmacy, customer profile, etc). How much Finance can the Business afford? Sigma has long been viewed as being at the forefront of arranging Pharmacy Finance. Through a unique series of Agreements with the major Financial Institutions in Australia, we can introduce you to the most appropriate product for your purchase at a competitive interest rate. Sigma is not paid any commissions by these banks to arrange your finance. Banks will generally lend between 70% to 80% of the assessed value of a Pharmacy for a term of either 10 or 15 years duration. Click on this handy Loan Calculator to calculate what your annual interest and principal repayments will be. Types of Finance Available There are a number of different forms of Finance available through our relationship banks. Whilst not an exhaustive list, they include:
Professional Services It is vital that you engage professionals within the Pharmacy industry to assist with your purchase. In addition to your Sigma Representative, the following are some of the Independent services that you should engage at an early stage in your purchase:
Business Plan Your Professional Advisors should be able to assist with the creation of a Business Plan. This document will be of considerable benefit both in planning for your purchase and also as a performance reporting tool post your acquisition. As a rule, your Business Plan should contain the following as a minimum:
Sundry Fees and Charges involved in Pharmacy Acquisition Your Sigma Representative can assist with estimating how much additional funds will be required to cover certain fees and costs that will need to be paid prior or at settlement:
Professional Services As per the earlier section, it is imperative you involve independent Professional advisors. These professionals will assist with
Documentation As per any Finance and Business Sale agreement, there will be a range of Security and other documents to be given over, which yours and the Bank's Legal counsel will assist with obtaining. These will include:
Purchase TimetableIt is important that you allow adequate time for the purchase of your Pharmacy business. Your Sigma Representative can assist you through the entire purchase process. As a guide, the loan process takes approximately six to eight weeks, and can be summarised as follows:
Note: Above 'time-line' is only an 'estimate' and assumes that there have been no delays in provision of supporting data, certificates etc. as called for by the Bank and execution of all necessary Security documentation is attended to promptly. Where complex ownership or corporate structures are to be utilised, we strongly recommend that applicants allow a minimum eight weeks for organising financial support. Business Acquisition Settlement Process The following are important procedures that you will need to complete prior to settlement:
Mandatory EquipmentWhen operating a Pharmacy, the following equipment is required under Section 32B of the Pharmacy Regulations, and you should ensure that these are present in your new pharmacy prior to settlement:
Acquisition Finance ChecklistClick here to download an Acquisition Finance Checklist, complete with Disclaimer. Useful Sites |
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