June 20, 2026 Medical & Allied Health

Understanding Commercial Mortgages for a Pharmacy

Buying the premises your pharmacy trades from is a considered step for any owner moving from tenant to holder of the freehold. At Ardent Capital Group we speak with pharmacy owners about this kind of commercial property purchase regularly, so this guide sets out how a lender reads the freehold, the goodwill and the way you hold the property.

Ardent Capital Group is a specialist in commercial mortgages for pharmacy owners across Australia. Our team can help you move from tenant to owner, and give you clear advice on structure and strategy.

Funding capacity: Access finance from $100,000 to $10,000,000+ for owner-occupied pharmacy premises and healthcare-aligned assets.
Track record: Over $500,000,000 arranged across the last decade for more than 1,000 borrowers.
National reach: Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Hobart and surrounding regional towns.
Sector focus: Structures aligned to PBS claim cycles, vaccination seasons and pharmacy cash flow.

Why buy rather than lease your pharmacy

Pharmacy fit-outs are capital heavy and highly customised. Dispensary benches, dispensary automation, Webster-packing equipment, refrigeration for vaccines and insulin, S8 drug safes, PBS terminals, consultation rooms and security systems tie your operation to the physical space. Owning the shell protects that sunk cost and reduces the risk of forced redesigns or relocation approvals.

Location drives repeat scripts and walk-ins. Co-location with a medical centre, position in a neighbourhood centre or near a supermarket, parking access and visibility all build a patient base over years. Ownership secures the address that feeds your script count and professional services.

The sector has resilient demand. PBS-backed prescriptions, an ageing population, vaccination services and front-of-shop sales create durable revenue through cycles. Converting rent into repayments builds equity in an asset that can support future finance.

Main drivers for buying:

Control: Set your own timetable for refurbishments and automation, with fewer landlord approvals.
Asset growth: Repayments build ownership in a property aligned to a defensive healthcare use.
Cost stability: Reduce exposure to unpredictable rent reviews and centre management changes.
Strategic fit: Secure co-location with GPs and allied health that underpins script volume.

Buying may not suit every owner. It is worth weighing against your plans if you expect to relocate to a stronger medical hub, your lease horizon is short with limited options, centre redevelopment is flagged, trading history is still thin, or capital would work harder in stock, workforce, acquisitions or automation. The decision sits with you, and we are glad to talk it through either way.

The mechanics of a pharmacy mortgage

Deposit and LVR. A pharmacy freehold generally gears to around 65 to 70 per cent of its value, so plan for a deposit near 30 to 35 per cent. On a $1,500,000 premises, that is roughly $450,000 to $525,000. Specialist pharmacy lenders read the premises alongside the business, and the goodwill is funded separately on its own terms, often against a turnover or EBITDA multiple, so the combined package can cover a substantial part of a going-concern purchase.

Loan term and structure. A bank commonly writes terms of 10 to 15 years, while a non-bank lender can extend to 25 to 30 years. Repayments can be principal and interest to build equity, or interest only for a period to prioritise cash flow around refurbishments, automation or stock. Arranging a pharmacy purchase is part finance and part ownership arrangement, so Nick and the Ardent Capital Group team map the lending around the holding you already use, then leave the tax and ownership detail for your accountant to confirm before you commit.

Security and serviceability. The property is the primary security. Lenders assess business financials, BAS, tax returns, PBS data, script volumes, gross profit mix and operating expenses. Serviceability modelling may include add-backs such as depreciation and normalisation of one-off costs. Valuation and zoning for pharmacy use are critical inputs.

Owner-occupier treatment. Lenders generally view pharmacy owner-occupiers favourably given the sticky revenue base and essential-service use, which supports competitive structures and terms. That is the position we present your file around.

Structuring the finance

Many pharmacy operators hold the freehold in a separate entity from the trading business and lease it back at a commercial rent; a lender then reads the inter-entity rent as the serviceability line, takes its security over the premises in the holding entity and looks to the operating company for the trading cash flow. Pharmacy ownership and location rules add a layer most commercial purchases do not, so the finance has to sit around an arrangement that keeps the PBS approval number and the pharmacist ownership requirements intact.

Holding and operating company split: A holding entity owns the freehold and leases it to the operating company that runs the pharmacy. The lender secures the premises in the holding entity and reads the lease and the operating company's trading accounts for serviceability. This ring-fences the property from the trading risk and keeps the dispensary fit-out and stock within the operating business.
Multiple trusts: A property trust holds the freehold while a separate trust holds the business and goodwill. Lenders will want the lease between them at market rent, and clarity on which entity holds the PBS approval and the pharmacist ownership interest, because that drives who can lawfully trade from the site.
Beneficiary and unit ownership: In a unit trust or partnership where several pharmacists co-own, the split of units or partnership interests sets who guarantees the loan and whose income services it. Lenders assess each principal's position, so the ownership percentages and the pharmacist registration behind them matter to the credit read.
SMSF with a bare (custodian) trust: A self-managed super fund can hold the pharmacy freehold through a limited recourse borrowing arrangement, with a bare trust holding legal title until the loan is repaid, and lease it back to your pharmacy at market rent. This suits owners focused on retirement asset building. SMSF lending gears lower than a standard purchase, usually around 65 to 75 per cent, with a cash buffer held inside the fund and tighter documentation. The premises must meet the business real property test, which a pharmacy trading from the site generally does.

Ardent structures the finance around your set-up; your accountant confirms the tax, super and ownership detail, and the pharmacy ownership and location compliance, before anything is locked in.

How lenders size up the deal

Business financials: Trading history, EBITDA, PBS claim summaries, script volume trends and the split between dispensary and front-of-shop.
Serviceability: Net operating surplus under interest rate sensitising, planned refit costs and any concurrent loans.
Property and valuation: Location strength, co-location with a medical centre, parking, tenancy profile, building condition and fit-out quality.
Deposit and equity: Cash on hand, ability to leverage your equity in other property, and evidence of savings.
Lease and occupancy: Current lease terms if buying an investment, or the proposed lease between your entity and the trading company.
Experience and compliance: Operator experience, accreditation, vaccination service setup and security compliance for S8 medicines.

A specialist broker fluent in pharmacy credit policy reduces friction, presents the right data and targets lenders comfortable with healthcare assets.

A scenario worth considering

This is an illustrative scenario that shows the kind of situation we can assist with, and how the thinking might run.

Situation: An established suburban pharmacy with strong script volume and a vaccination clinic, currently paying rent of $155,000 per year, with the chance to buy the shopfront for $2,200,000 including adjoining storage.
Objectives: Fix the occupancy cost, protect a $600,000 fit-out investment, and leave headroom for a dispensary automation upgrade within 12 months.
Owner-occupier freehold: The owner would look at a freehold facility geared to around 70 per cent, so a deposit near $660,000 funded from business cash and a small equity release against the home to leverage your equity. Repayments would be sized around PBS claim cycles, with rent set at market from the trading entity to the property entity to support serviceability.
Premises plus goodwill: Where cash needs to stay in stock and automation, the owner would look at pairing the freehold facility with separate goodwill lending assessed on a turnover or EBITDA multiple, so more of the going-concern purchase is funded without draining working capital. This needs clean financials and a clear lease between the entities.
SMSF purchase: The owner could instead have their SMSF acquire the freehold and lease it back at market rent under a limited recourse borrowing arrangement, geared lower with a cash buffer retained inside the fund. This suits owners prioritising retirement asset building.
Timing and fit-out: Contract dates would be aligned with stocktake and PBS claim timing, and the automation upgrade staged after settlement with separate asset finance to preserve working capital.
How we would approach it: We would map the ranges, structures and repayments, then work through the trade-offs with the owner and their accountant. The figures above are illustrative, not confirmed outcomes, and any path would be subject to valuation and credit approval.

Related finance for a pharmacy

Asset finance for pharmacy equipment: Fund dispensary automation, Webster-packing systems, vaccine-grade refrigeration, POS and security with terms aligned to useful life.
Fit-out and refurbishment finance: Reflow the dispensary, add consultation rooms and upgrade safes and shelving without draining cash.
Working capital loans: Cover stock bulges ahead of seasonal demand and smooth cash while PBS claims settle.
Business overdraft: Manage day-to-day swings in claims, wholesaler terms and front-of-shop sales.
Refinancing and debt consolidation: Reprice legacy facilities and simplify multiple loans from past refits or acquisitions.
Construction and renovation: Expand floor area, add vaccination suites or integrate a compounding lab to meet local demand.
Business or premises acquisition finance: Buy a second site, buy out a partner, or secure a freehold coming to market in your centre.

These facilities work together. Owning the premises can free equity over time, dedicated pharmacy equipment finance keeps depreciating kit off the property security, and working capital for a pharmacy smooths cash while PBS claims settle, while a refinance consolidates shorter-term facilities into a cleaner structure.

Specialist finance for pharmacy premises

Ardent Capital Group arranges and structures commercial mortgages for pharmacy owners, matched to how you hold and occupy the property. We design the loan around your entity structure, lease and cash flow priorities, and we work across purchase, refinance and equity release.

We service Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra and surrounding metro and regional areas. We have helped arrange over $500,000,000 in funding over a decade for more than 1,000 borrowers.

If you are weighing up buying your pharmacy premises, the structure and the strategy matter as much as the rate, and clear advice on both is what we give business owners so the finance supports the wealth you are building and the years ahead. For a clear read on your borrowing position, a pharmacy property loan is where the conversation starts.

Frequently asked questions

How much deposit do I need to buy my pharmacy premises? A pharmacy freehold generally gears to around 65 to 70 per cent of its value, so plan for a deposit near 30 to 35 per cent, with the goodwill funded separately on its own terms.

Can my SMSF buy the building and lease it to my pharmacy? Yes, a commercial freehold generally meets the business real property test, and the SMSF can lease it back at market rent under a limited recourse borrowing arrangement, typically geared around 65 to 75 per cent with stricter liquidity rules.

Do lenders favour pharmacies co-located with a medical centre? Yes, proximity to GPs and allied health, good parking and strong visibility are positives in valuation and credit assessment.

How do script volumes and PBS data affect approval? Lenders review PBS claim history, script counts, revenue mix and margin to test serviceability and resilience, alongside standard financial statements.

Can I combine equipment finance with the commercial mortgage? Yes, many owners settle the property loan and run separate asset finance for dispensary automation, refrigeration and POS to preserve cash and keep terms aligned to asset life.

How is the goodwill funded when I buy the pharmacy and the premises together? The freehold is funded as a commercial mortgage against the property, while the goodwill is assessed separately, often on a turnover or EBITDA multiple, so a going-concern purchase usually combines two facilities.

How long does approval and settlement usually take? With clean financials and a straightforward valuation, expect four to eight weeks from application to settlement, with timing influenced by the lease set-up between your entities and council searches.

Written by

Nick Chong

Managing Director, M.AppFin, Dip. Mortgage Mgmt

Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.