Understanding Criteria for Pharmacy Business Loan
In the market, many pharmacies work in collaboration with major medical names and then, there are those pharmacy owners who are independent. These independent owners, from time to time will require additional working capital for their businesses. To obtain said finances, they will most likely visit a bank or banker to discuss their financing options.
As is the case with any other business owner in need of some financial assistance, banks are required to access the business’ current creditworthiness which also means specific data about the pharmacy. This information is carefully scrutinized, and their FICO rating also needs to be high to qualify for funding. In some cases, the owner has had issues with late payments to suppliers; for example, more often than not, the application may be rejected. Thus, this article is here to help avoid business loan rejection when you apply for a business loan.
There are also times when business owners are not satisfied with the options that are there for them when seeking loans for their pharmacy at one bank. Often, many pharmacy owners might be looking for additional working capital purchase inventory from a new supplier, to change up their current location, move to a new location, change their signs or even upgrade their POS terminals. To finance all these various contingencies, such finances may not be readily available in just one pharmacy business loan. This means that the business owner might have to try other banks to get their business loans.
Basics to apply for a Pharmacy Business Loan:
Applying for a pharmacy business loan in India requires the owner to present a certain number of their business and personal details to start the process for a business loan application. In the case of an SME owner, it is easy for them to apply for financial aid. The documents and general eligibility criteria required to know about before applying for a loan application is written below.
Criteria to qualify for a Pharmacy Business Loan:
- To meet one basic requirement, the applicant should at least be 21 years of age when applying for the loan
- Another basic requirement for the business revolves around turnover. The business that the owner is getting a loan for must have a minimum monthly turnover of at least two lakhs.
- The last basic requirement needed is for the applicant to have a certain number period of experience operating the pharmacy. In this case, the minimum period is 12 months.
Documents needed for a Pharmacy Business Loan:
In case the above criteria are met, then the applicant is required to have the documents listed below when they are applying.
|Photographs||A total of two passport-sized photographs are required when applying|
|Proof of Identity||This can be in the form of PAN Card, Passport, Aardhaar Card, Voter’s ID or Driving License|
|Address Proof||This document can be the Passport, Voter’s ID, phone bill, Driving License|
|Age Proof||Age proof can either be through PAN card or passport|
|Bank Statements||Printout of bank activity from the applicant’s account dating back over the last six months|
|Proof of income||Income the proof is verified through Salary slips or Income Tax Returns|
|Signature proof||Can use either the Passport, PAN card or bank verified signature for proof|
Things to remember before applying for the Loan:
Before setting out to find more funding for the pharmacy, there are a few things that should be addressed first. Before heading into the business, it is important to analyze a few essential aspects of a pharmacy business
- Research the market: Like any other market, the pharmacy market is one that is highly competitive, and therefore, it is vital to take a moment and gauge the current market condition. Find out about what is missing from the market and how the owner can contribute to that gap. Also, it helps to look for and to find a location that would provide the maximum exposure to the business.
- Have a robust business plan: Having an effective business plans helps to set a clear roadmap for the business. It is important to have a step by step process, plan on ways to ways to achieve any set goals, decide on products that the majority of the customer audience is interested in and assess the competition’s current strategies.
- Regulations and Registration: As a pharmacist, it is required to have certain licenses or registrations. To operate the business legally, a pharmacist is required to have a certificate of authorization from the Drug Department. Aside from this, pharmacists may need to apply for a GST identification number.
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