By Brad MacLiver
Authorship and profile at Google
When a RI pharmacy acquisition has been accomplished by using the private financing method of a pharmacy business note, the holder of the pharmacy note has the option of selling the pharmacy business note for a lump sum of cash instead of waiting for the monthly payments and taking the risk those payments will always be made. Pharmacy business notes can be sold by using a discounting method. Instead of buying a pharmacy note at its face value, theRhode Island
MostRhode Island
1. What is the motivation for selling the RI pharmacy note? What are the desired goals? Is reducing the exposure to risk a consideration? Is there a financial decision to pay off debt? Is capital required for a new venture? Are there dreams of exotic vacations or world travel that could be accomplished with a lump sum of cash? How important is it to accomplish these goals? What are the opportunity costs if you don’t have the lump sum of cash to achieve your goals, or invest in something that pays a higher return? Determine investment and family priorities.
2. What is the Current Fair Market Value of the pharmacy business? This is what someone is really willing to pay for the business, and not just an “earnings times x” formula. Real aspects of what is happening in the pharmacy industry must be considered and it is advantageous to have a pharmacy industry specialist inRhode Island
3. How much cash is immediately required by the holder of the pharmacy note?
4. A pharmacy note inRhode Island
5. Are you willing to sell only a portion of the Note (this is called a “Partial Sell”)? The discount rate can be a more attractive proposition when only a portion of the note is sold and the Pharmacy Note Investor is not holding all the risk.
Understanding the Risk for the Note Buyer:
1. Pharmacy Buyer Competency - There is the risk that the pharmacy buyer inRhode Island
2. Changes in the Pharmacy Industry - Changes that are caused by influences either within the industry or by regulations governing the industry may make it increasingly difficult for theRhode Island
3. Future Competition - Sales or income of the store might be affected by unforeseen RI pharmacy competition either building in the neighborhood or through mail order.
4. Loan to Value - When a pharmacy business note is originated, you may be creating a financing situation with a “negative loan to value.” Example: the pharmacy business note in RI is for $650,000, but there is only $250,000 of tangible assets for collateral.
5. Title Insurance –Rhode Island
6. Time Value of Money - When a dollar received today has more value than a dollar received in the future.
7.Opportunity Costs - When the selection of holding the RI pharmacy business note ties up capital and prevents potential financial gains from other investments.
It is a good idea to discuss all available options and potential origination of a pharmacy note with Pharmacy Business Note Investor before the Purchase and Sale Agreement is finalized for the acquisition of the pharmacy. This provides theRhode Island
************************
Authorship and profile at Google
When a RI pharmacy acquisition has been accomplished by using the private financing method of a pharmacy business note, the holder of the pharmacy note has the option of selling the pharmacy business note for a lump sum of cash instead of waiting for the monthly payments and taking the risk those payments will always be made. Pharmacy business notes can be sold by using a discounting method. Instead of buying a pharmacy note at its face value, the
Most
1. What is the motivation for selling the RI pharmacy note? What are the desired goals? Is reducing the exposure to risk a consideration? Is there a financial decision to pay off debt? Is capital required for a new venture? Are there dreams of exotic vacations or world travel that could be accomplished with a lump sum of cash? How important is it to accomplish these goals? What are the opportunity costs if you don’t have the lump sum of cash to achieve your goals, or invest in something that pays a higher return? Determine investment and family priorities.
2. What is the Current Fair Market Value of the pharmacy business? This is what someone is really willing to pay for the business, and not just an “earnings times x” formula. Real aspects of what is happening in the pharmacy industry must be considered and it is advantageous to have a pharmacy industry specialist in
3. How much cash is immediately required by the holder of the pharmacy note?
4. A pharmacy note in
5. Are you willing to sell only a portion of the Note (this is called a “Partial Sell”)? The discount rate can be a more attractive proposition when only a portion of the note is sold and the Pharmacy Note Investor is not holding all the risk.
Understanding the Risk for the Note Buyer:
1. Pharmacy Buyer Competency - There is the risk that the pharmacy buyer in
2. Changes in the Pharmacy Industry - Changes that are caused by influences either within the industry or by regulations governing the industry may make it increasingly difficult for the
3. Future Competition - Sales or income of the store might be affected by unforeseen RI pharmacy competition either building in the neighborhood or through mail order.
4. Loan to Value - When a pharmacy business note is originated, you may be creating a financing situation with a “negative loan to value.” Example: the pharmacy business note in RI is for $650,000, but there is only $250,000 of tangible assets for collateral.
5. Title Insurance –
6. Time Value of Money - When a dollar received today has more value than a dollar received in the future.
7.
It is a good idea to discuss all available options and potential origination of a pharmacy note with Pharmacy Business Note Investor before the Purchase and Sale Agreement is finalized for the acquisition of the pharmacy. This provides the
************************
