Partnerships in Pharmacy
For those of you who are unaware (probably very few), Partnership can make the whole process a lot easier as the senior partner is essentially funding the junior partner in. Banks do not lend against half a pharmacy, they take security against the whole business. It’s all or nothing and they rarely like to be second in line from a security position. A simple example for illustrative purposes is as follows:
| Total Purchase price | $2,000,000 |
| Existing Partner debt | $500,000 |
| 50% Buy in Price | $1,000,000 |
| Total funding available from Bank - 75% of total | $1,500,000 |
| Total funding available for Junior partner | $1,000,000 |
| Percentage of finance of the buy in price for young Pharmacist | 100% |
This simple example highlights the fact that in this situation the young Pharmacist can lend up to 100%. Remember the Senior Partner normally uses the funds received to reduce his or her debt (or even repay the whole debt) and hence reducing the Banks exposure even further. When this is taken into account the junior partner nearly always has the ability to lend more when buying in this type of situation. However, it should the senior partner will require appropriate measures to protect his or her assets.
Partnership Facilitation Program:
Medici Capital has developed an Australia wide Partnership Register, which is designed to introduce suitable Junior and Senior Partners who are both interested in entering a practical, feasible and rewarding partnership agreement. For more information, please submit a Partnership Enquiry.