Use this checklist to assess businesses in this industry for SBA 7(a) lending and underwriting.

🧑‍⚕️ Licensing, Ownership & Staff Coverage

• Is the owner a licensed pharmacist and the primary person filling prescriptions?
• Is there a buyer in place with a valid pharmacy license or transition plan?
• Has a market-based wage been applied to replace the owner-pharmacist?
• Is there a non-compete agreement or goodwill transfer strategy post-sale?

💸 PBM, Insurance & Reimbursement Risk

• What percentage of revenue comes from PBM, Medicaid, or insurance reimbursements?
• Have reimbursement rates trended up or down over the last 3 years?
• Are delayed reimbursements, clawbacks, or below-cost fills disclosed and normalized?
• Are major payers or PBMs concentrated in a few contracts or diversified?

🏥 Inventory, CapEx & Compliance

• Is inventory properly aged and valued (no obsolete or expired drugs)?
• Are inventory costs updated monthly and aligned with actual fill rates?
• Are DEA, state board, and compliance systems in place and transferable?
• Is there a CapEx plan for pharmacy systems, software, and automation tools?

📊 Addbacks & Goodwill Concerns

• Are addbacks legitimate and well-documented (e.g., no self-paid consulting)?
• Is goodwill assigned to enterprise, or just tied to the seller’s license/relationships?
• Have legal or professional fees tied to non-business entities been excluded?
• Is there any reliance on compounding/custom scripts that are unlicensed or unscalable?

🚩 Red Flags

• Owner fills 90%+ of prescriptions with no backup or comp normalization
• PBM reimbursements declining with no offset strategy
• Addbacks include questionable items (e.g., ‘consulting’, owner-paid rent, perks)
• No buyer pharmacist identified and no non-compete in place from seller

📌 SBA SOP Tip

Underwriters must consider pharmacist licensing requirements, normalize owner labor, and account for payer reimbursement risk. Underwriting should be backed by documented transitions, diversified payer mix, and clear inventory/accounting systems.