Buying a Good Neighbor Pharmacy franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 8 7(a) loans to buy an existing Good Neighbor Pharmacy (classified mostly as Pharmacies and Drug Retailers), totaling $20.5M. The median loan was $2,239,200, 247% higher than the $645,250 median for all SBA-financed acquisitions. 2 of these loans were approved in the last two fiscal years.
Terms signed in the LOI shape the purchase agreement that follows.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Good Neighbor Pharmacy resale loans landed between $1,389,000 and $3,691,250.
- Lender experience exists. First Financial Bank alone has financed 5 Good Neighbor Pharmacy resales.
- Guaranty. The SBA guaranteed 77% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a Good Neighbor Pharmacy resale
The median SBA 7(a) loan for a Good Neighbor Pharmacy resale was $2,239,200 across 8 loans (FY2018 to FY2026). First Financial Bank, Live Oak Banking Company and Mission Valley Bank have financed the most Good Neighbor Pharmacy resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
Good Neighbor Pharmacy acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 0 | $0 | - | |
| FY2019 | 1 | $4M | $3,965,000 | |
| FY2020 | 2 | $3.7M | $1,834,200 | |
| FY2021 | 2 | $6.3M | $3,132,000 | |
| FY2022 | 0 | $0 | - | |
| FY2023 | 1 | $3.6M | $3,600,000 | |
| FY2024 | 0 | $0 | - | |
| FY2025 | 1 | $2.2M | $2,160,000 | |
| FY2026 | 1 | $890K | $890,000 |
How often do these acquisition loans fail?
Fewer than 20 Good Neighbor Pharmacy acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
Seller note standby terms and third-party consents are reviewed before closing.
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Lenders financing Good Neighbor Pharmacy resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | First Financial Bank | 5 | 62.5% | $14.2M | |
| 2 | Live Oak Banking Company | 2 | 25.0% | $5M | |
| 3 | Mission Valley Bank | 1 | 12.5% | $1.4M |
States where Good Neighbor Pharmacy units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | California | 3 | 37.5% | $9M | |
| 2 | Arkansas | 1 | 12.5% | $4.9M | |
| 3 | Ohio | 1 | 12.5% | $2.3M | |
| 4 | Illinois | 1 | 12.5% | $2.2M | |
| 5 | Pennsylvania | 1 | 12.5% | $1.4M | |
| 6 | Wyoming | 1 | 12.5% | $890K |
Seller note standby terms and third-party consents are reviewed before closing.
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How lenders classify Good Neighbor Pharmacy
Lenders code each loan to a NAICS industry. For Good Neighbor Pharmacy the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Pharmacies and Drug Retailers | 7 | 87.5% | $19.1M | |
| 2 | Offices of All Other Miscellaneous Health Practitioners | 1 | 12.5% | $1.4M |
Questions buyers ask
How much do buyers borrow to buy a Good Neighbor Pharmacy franchise?
The median SBA 7(a) loan for a Good Neighbor Pharmacy resale was $2,239,200 across 8 loans (FY2018 to FY2026). The middle half of loans ran from $1,389,000 to $3,691,250. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance Good Neighbor Pharmacy acquisitions?
First Financial Bank has made the most SBA acquisition loans for Good Neighbor Pharmacy (5, 63% of the total). Live Oak Banking Company, Mission Valley Bank follow.
What interest rate and term do Good Neighbor Pharmacy acquisition loans carry?
The average initial rate at approval was 7.00% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 10 years.
Is a Good Neighbor Pharmacy resale riskier than other SBA-financed acquisitions?
Too few Good Neighbor Pharmacy acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are Good Neighbor Pharmacy units being bought with SBA loans?
California (3), Arkansas (1), Ohio (1), Illinois (1), Pennsylvania (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
The purchase agreement decides what you bought, not the loan approval.
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Related
- All Pharmacies and Drug Retailers acquisitions
- California acquisitions
- Arkansas acquisitions
- Ohio acquisitions
- First Financial Bank
- Live Oak Banking Company
- Mission Valley Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Good Neighbor Pharmacy" (franchise code S3586). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.