How To Get Start-up Capital Or Loan For A Pharmacy Business

Is like all pharmacists have a killer business idea that will revolutionize the world in one way or the other. Start-up capital or money is the only limitation they are facing. The money is usually on the high side. To sort for such an enormous amount of money is a major problem. They want the money now and fast to carry out their ideas. This is the main reasons majority fall into more problems they can't later solve.
Pharmacists in Nigeria can get access to different types of loan. This is because lenders know that the profession is profitable at all fronts as compared to other profession. They are willing to invest and cash out too. But truth be told, very few lenders are good idea while the others can be a pain in the leg.
Read Also: Step In Starting A Retail Or Community Pharmacy Business
Sourcing for funds or capital to start-up a business is quiet different from expanding an already established business. It is even more easy to get loan for the expansion than for start-up. In all, it is good to consider so many things before venturing into it.

Capital And Loan

Good And Bad Source Of Start-up Capital

Job And Saving

The best way to source for funds for your start-up is to get a job in a well paying place. You can even get a side hustle to increase the pay. However, all these will be futile if you do not have a discipline saving mentality. The amount you save each period should be fairly constant. Work out the total amount you need for the start-up. That will give an idea how long you need to work and save. Always plan ahead. Increase the estimate of the start-up capital a bit to compensate for any change in purchasing power of currency. For example, if the cost of start-up capital today is a million naira, it is best to estimate the cost to go up a bit to about 1.2 million naira in two years time.

Family And Friends

It is possible your savings was not enough after the stipulated time. If you are out of time and very much eager to kick start your ideas, your best bet is your family and friends. You may be the daughter of Dangote or the inlaw to Otdola. All you need to do is to give out a sound business proposal stating what you already know and have. This will spark interest in you and your ideas. Remember, not even the world richest man like waste. Every body want to see the value their investment is yielding. And before you think in this direction, make sure you have previously build the trust they need to believe in your ideas and if you will pay back. In most cases, families don't ask for a refund. In cases they ask for a refund, they may not include interest rate. However, in all let terms and conditions be known before an transaction. If the terms is difficult, please quit. Some can give loans that are difficult to pay. No family in business.

Grants And Investors

This the most common method of funding companies. An individual or company can give money to a start-up to begin or to expand an already existing business. The profit is shared between both parties based on the percentage of shares that was involve. This is very suitable for pharmaceutical companies or industry. To be able to woe people to invest in you and your ideas, you need a good business plan or proposal. The proposal most include every details about your projection how the business will survive. There are cases these investors wants a place in the board of directors to see how the business will grow.

Money Lenders And Bank Loans

Money lenders are individuals who provide money to others with or without collateral. Their interest rate is very high. Rumours have it that they are also into voodoo to make their debtors their slaves. Runaway from these people.
Many banks advertise juicy loan plans. Below all that, they will say terms and conditions apply. Reading their terms and conditions written in small size, bad fonts and poor colour can be a herculean task for lazy people. That is their aim. To prevent people from reading it. And their vocal explanation of the terms and conditions of the loan is hidden within their sweet talks. They give loans with collateral. Their interest rate is high. Their method of payment is complicated. Many don't even give you time to settle before the start of payment. It is estimated that it takes about two years for most business to stand. Most business don't get up to a year before they close down because of the loan repayment plans of some banks. They push you immediately the business kick start to start payment. That is enough to crash the business.
However, there is just two good method of funding your community pharmacy or pharmaceutical industry business in Nigeria. It is through the Bank of Industry and Central Bank of Nigeria.

a. Central Bank Of Nigeria (CBN) Loan

This is the best loan for any business in Nigeria. With very low interest rate, flexible payment plan spread across years of service, your business should be able to survive the storm if you are a good manager. However, it is advisable to pay up upfront if you are able to. This helps to increase your ratings with the banks in case you need loans again in the future maybe to expand the business.
Read Also: Cost Of Starting A Retail Or Community Pharmacy
With partnership with microfinance banks, Non governmental organization/Microfinance institutions, finance companies and financial cooperatives, you can get a loan below 500000 naira without collateral. For those who wish to get loans above 500000 to 50000000 naira, CBN partnered with deposit money banks, Bank of Industry and bank of agriculture. The interest rate could be as low as 5% or 9% maximum. The beautiful part of it is that there is no discrimination against the type of business. The bottom line is that if it is a legal business. The process is very simple. Community pharmacy and pharmaceutical companies can get the loan of their choice. It is also open to national youth service corps (NYSC) members and those who have served within the past five years.

b. Bank Of Industry (BOI) Loan

The bank of industry provide loan to finance industry. It is not actually for start-up. It is for a business already in existence for at least three years and register as a company and not as an individual. They require about 25% from the company and they provide the rest. They have some strict requirements. However, if you and your company meets these requirements, the loan is very good and repayment plan is fair. They don't give the borrower the cash at hand. They disburse the funds to vendors and suppliers of equipment that the loan application is for. The loan is not for some of the basics like the building.
BOI also partner with CBN and some other Small Medium Enterprise (SME) banks to assist small scale business in Nigeria. Under their monetary policy rate plus 6 percent, small business like community pharmacy can assess loans for as much as 5 million naira.
Always bear in mind that a wrong loan plan can be the end of a beautiful business idea.
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