By Brad MacLiver
Authorship and profile at Google
When a CO pharmacy or drug store is being sold, seldom does the buyer pay “out of pocket” cash for the acquisition. Even when cash is available, pharmacy acquisition strategies usually involve financing the transaction.
Typical acquisitions take 6-9 months to complete, so theColorado
Along with the buyer and seller the acquisition will involve attorneys, accountants, lenders, valuation companies, industry specialists, along with others. No one wants to pursue 6-9 months of work involving a variety of highly paid professionals without having some confidence of theColorado
The process will begin with determining the value of the business. There are many companies that offer valuation services. However, CO pharmacies are not ice cream stores. There are many aspects of valuing a pharmacy that are unique to the industry, so simple accounting formulas or generic methods cannot be used. Industry specialists should be used when valuing the pharmacies instead of a valuation company that has a broader spectrum.
In order to complete a valuation the selling company must provide current data. Lenders will refuse old data or a sellers “gut feeling.” Lenders need to make their decision to finance based on sound, verifiable information.
Structuring the transaction is very important. The seller will naturally want as much money as possible, and they want cash. Also, the buyer will need to spread out the debt service with as little cash as possible invested in the acquisition.
Pharmacies and drug stores belong to an industry where it is more difficult to obtain business loan due to the majority of the value in a pharmacy inColorado
Pharmacies have typically been known for generating profits and to be stable businesses. However, they are usually in leased locations, and their furniture, fixtures, and computers will only provide $15-20,000 of collateral for a buyer possibly requesting a million dollar loan. A lot of money is tied up in inventory, but the small pills are considered by a lender to easy to move out the door in the event of default. Due to these circumstances many lenders will not loan money to these traditional money making businesses. A successful transaction takes a lender that understands theColorado
Tips regarding CO pharmacy acquisitions and finance:
1. Attorneys and CPAs who have been representing the pharmacy seller for many years may see the transaction as putting themselves in a position of losing a client when the business is sold. Make sure they are working diligently on the transaction and are not slowing or undermining the process
2. Since pharmacy acquisitions inColorado
3. All financial information needs to be current. Over the lengthy process the data supplied to both the buyer and the lender will need to be updated on a continuous basis. Things can change drastically during a nine month period and the pharmacy seller will need to continually prove the financial condition of the company.
When pursuing “CO pharmacy acquisition finance,” for the best chance of success, make sure the valuation company and the lender have expertise in that industry. Choose a company that has the pharmacy experience and expertise, and is a direct correspondent with lenders who understand pharmacy.
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Authorship and profile at Google
When a CO pharmacy or drug store is being sold, seldom does the buyer pay “out of pocket” cash for the acquisition. Even when cash is available, pharmacy acquisition strategies usually involve financing the transaction.
Typical acquisitions take 6-9 months to complete, so the
Along with the buyer and seller the acquisition will involve attorneys, accountants, lenders, valuation companies, industry specialists, along with others. No one wants to pursue 6-9 months of work involving a variety of highly paid professionals without having some confidence of the
The process will begin with determining the value of the business. There are many companies that offer valuation services. However, CO pharmacies are not ice cream stores. There are many aspects of valuing a pharmacy that are unique to the industry, so simple accounting formulas or generic methods cannot be used. Industry specialists should be used when valuing the pharmacies instead of a valuation company that has a broader spectrum.
In order to complete a valuation the selling company must provide current data. Lenders will refuse old data or a sellers “gut feeling.” Lenders need to make their decision to finance based on sound, verifiable information.
Structuring the transaction is very important. The seller will naturally want as much money as possible, and they want cash. Also, the buyer will need to spread out the debt service with as little cash as possible invested in the acquisition.
Pharmacies and drug stores belong to an industry where it is more difficult to obtain business loan due to the majority of the value in a pharmacy in
Pharmacies have typically been known for generating profits and to be stable businesses. However, they are usually in leased locations, and their furniture, fixtures, and computers will only provide $15-20,000 of collateral for a buyer possibly requesting a million dollar loan. A lot of money is tied up in inventory, but the small pills are considered by a lender to easy to move out the door in the event of default. Due to these circumstances many lenders will not loan money to these traditional money making businesses. A successful transaction takes a lender that understands the
Tips regarding CO pharmacy acquisitions and finance:
1. Attorneys and CPAs who have been representing the pharmacy seller for many years may see the transaction as putting themselves in a position of losing a client when the business is sold. Make sure they are working diligently on the transaction and are not slowing or undermining the process
2. Since pharmacy acquisitions in
3. All financial information needs to be current. Over the lengthy process the data supplied to both the buyer and the lender will need to be updated on a continuous basis. Things can change drastically during a nine month period and the pharmacy seller will need to continually prove the financial condition of the company.
When pursuing “CO pharmacy acquisition finance,” for the best chance of success, make sure the valuation company and the lender have expertise in that industry. Choose a company that has the pharmacy experience and expertise, and is a direct correspondent with lenders who understand pharmacy.
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