Unsecured Pharmacy Business Finance

Unsecured Pharmacy Business Finance

A unique bespoke service developed for independent pharmacist businesses puts the Pharmacist in control of his NHS prescription side of the pharmacist business enabling him to release immediate cash and also enabling cash release on a daily basis based on daily sales.

The cash released from the NHS prescription payment (PPA) cycle enables pharmacists to re-invest in their businesses in areas such as improved merchandising, upgrading of premises or any other purpose.

The service is easy to use. It is non-intrusive and not tied to any wholesaler or industry supplier. It is not a loan, and grows with the pharmacists as the business grows.

Unlike typical retailers, independent community pharmacists make 80% or more of their sales on credit terms due to the NHS payment cycle.
The NHS / PPA payment cycle is complex, resulting in a minimum payment delay to pharmacists of 52 days.

In addition to having to fund the complex and long payment cycle of the NHS / PPA, the amount outstanding grows each year as the overall drugs bill increases. The drugs bill has increased at an average of 9.5% a year s a result of the growth in demand for drugs due to
(1) An aging population causing more prescriptions to be written;
(2) The changing mix toward higher priced drugs;
(3) Increases in drug prices.

The NHS expects this growth to continue at 8%. The effect on pharmacists of both the initial investment they had to make to fund the NHS prescriptions and the increases in the drugs bill that results in a very significant amount of capital tied up in the NHS / PPA payment cycle. For an average independent pharmacists with annual NHS re-imbursements of £500,000 per year, this results over £71,000 caught up in the in the payment cycle.

The Pharmacy Business Finance service enables an immediate release in the capital caught up in the NHS / PPA payment cycle which is £71,000 on average. Taking this forward the Pharmacy Business Finance service releases cash on a daily basis eliminating the need for the pharmacists to fund the increasing NHS drugs bill.

Pharmacy Business Finance service purchases the pharmacist’s NHS Prescriptions which are receivable assets outright for immediate cash less a small discount, The pharmacy business finance service is not a lending institution. There is no loan facility; hence there are:

· No loan repayment obligations,
· No security requirements,
· No intrusive monitoring arrangements,
· No requirement to meet minimum purchasing obligations, as in the case of typical
wholesaler guaranteed loans,
· No prepayment restrictions or penalties, and
· No termination penalties (terminable in 30 days).

In fact, the pharmacy business finance service is better than a loan as it:

· Eliminates the need to keep on funding increases in the NHS receivables,
· Provides valuable financial information
· Converts the business to a cash business on a daily basis and thereby increasing the
pharmacists control over the business.

The duration of the cash release is either long term or short term (terminable on giving one month’s notice) depending on the requirements of the pharmacist. It may therefore be viewed as a source of permanent development capital.

While the service has universal appeal as to the pharmacist’s ability to gain control over his NHS business by converting it to a cash business on a daily basis, the value of Pharmacy Business Finance service is most helpful to pharmacists wanting funds to:

· Refit their pharmacy
· Take full advantage of shortline wholesaler opportunities
· Pay suppliers more quickly to earn settlement discounts
· Pay off expensive debts
· Releasing cash to buy a complementary business
· Developing additional clinical services
· Developing new retail initiatives
· Reduce the dependence on a single wholesaler
· Eliminate restrictions on borrowing
· Releasing oneself from personal guarantees
· Avoid lengthy and complicated commitments – the pharmacy business
finance service contract may be terminated on 30 days’ notice

For further information and to receive a visit from a Business Relationship Manager throughout the UK please email me in the first instance.