Financing Support

Buyer Services

Ownership Consultant

Financing Support

Testimonials

Putting our money where our minds are.

McKesson can help you identify and evaluate the myriad financing options available to you as you prepare to buy a pharmacy. We have an active portfolio of loans for buyers, and a long tradition of providing financing support to independent retail pharmacies. McKesson area credit managers work with more than 800 independent pharmacies and can share their expertise with you on financing and credit issues.

At any one time, McKesson has $10 million or more in debt loans in place with customers. We evaluate dozens of loan requests annually, reviewing them against industry-standard requirements. Using these time-tested standards protects both the customer and McKesson.

Below are the basic requirements for long-term financing, defined as one year or longer, from McKesson:

• Equity contribution in the range of 15–25%: As the buyer, you must put up a significant down payment from your own resources. It is important that you have significant “skin in the game” and be willing to place your resources at risk just as our resources are at risk.
• Collateral coverage of 1:1: For every dollar loaned, there must be a dollar of tangible goods that could be sold to pay off the debt. This collateral takes the form of inventory and accounts receivable. McKesson will also grant some value to the Rx files.
• First secured position filed under the Uniform Commercial Code (UCC): In the case of bankruptcy, McKesson must be the first creditor to be paid off.
• Maximum of five-year term: The typical term of financing from McKesson is three years, with a maximum of five years. Loans with a longer term than five years indicate that the pharmacy is overextended or unprofitable.
• Interest rate: McKesson charges prime +2% when financing an independent pharmacy. Often, lower rates are available through other sources.
• Complete financial documentation: A full understanding of the financial health of the pharmacy — and how it has performed operationally in the recent past — is critical to financing. In many cases, the McKesson area credit manager will have some of this information available for existing customers. McKesson must review two years of financial statements and interim statements to evaluate the loan. Financial statements should include:
  • Income statement
  • Balance sheet
  • Cash flow statement
  • Projections and/or a business plan, including background information on the principals
  • Personal financial statement
• Personal guaranty from the buyer: The buyer must personally guarantee the loan from McKesson by completing McKesson’s form of personal guaranty.
• Valuation of the business: The loan amount is tied to the worth of the pharmacy. There are multiple methods for determining pharmacy valuation, as noted above. McKesson Credit uses a combination of valuation methods, including percentage of sales, EBITDA multiple, and percentage of sales plus inventory.