FINANCIAL SOLUTIONS FOR PHARMACISTS: LAURENTIAN BANK OFFERS ITS EXPERTISE TO
HELP CHOOSE THE APPROPRIATE VEHICLE

MONTREAL, Nov. 25 /CNW Telbec/ - In order to assure the effective operation of their pharmacy, owner pharmacists must have access to sources of financing that offer them ready credit. Laurentian Bank is highly familiar with the contexts that lead these entrepreneurs to seek various types of financing, and the Bank's Pharmacy sector team can recommend different financial solutions to enable them to optimize their business affairs while simplifying the management process. One of the fundamental principles in the development of such solutions is making the appropriate choice when it comes to the type of financing based on the specific needs or project in question.

Short- and Long-Term Financing: Using Accounting Logic

Financial solutions are developed to meet specific needs. In that regard, short-term expenses will be more profitably handled with short-term financing tools, while long-term expenses are better off being financed over a longer period.

For the management of a pharmacy's daily activities, short-term financing focused essentially on the use of an operating line of credit will be particularly beneficial for maintaining prescription inventories, procuring various furnishings, paying supplier accounts, and covering operating expenses. For its part, long-term financing will take the form of term loans.

Laurentian Bank offers four formulas in response to different needs. Firstly, the Equipment Acquisition loan allows for the replacement or modernization of equipment, as well as for the improvement of productivity with the help of new technologies. The Goodwill Financing loan is designed for the acquisition of a pharmacy, association with another pharmacist, or for equity withdrawals based on the enterprise's assets in order to finance various plans related to personnel. Another type of Acquisition loan is used for the purchase of a building, a parcel of land, of for the opening of a new branch. Finally, the Leasehold Improvement loan serves to modernize or renovate existing installations.

"The pharmacist must look for a balance between short-term and long-term financing solutions," explains Monique Lo, Senior Manager of the Bank's Pharmacy sector. "As such, by using their operating line of credit — a short-term financing solution — to cover inventory costs, they can take full advantage of the savings offered by suppliers while retaining their room to manoeuvre in the long-term with respect to elements whose financing is best carried out over time." Thus, long-term assets such as fixed assets, equipment and leasehold improvements will require lower monthly payments when they are amortized over a longer period, thereby reducing operating costs as well.

Other Considerations for Greater Latitude

In the evaluation of a file at Laurentian Bank, long-term assets also include goodwill — a factor few financial institutions take into account. "Although it constitutes an intangible asset, goodwill represents a real value on the basis of which we can offer additional credit," underlines Monique Lo. "In many cases, goodwill justifies financing awarded over a period of 12 years."

The repayment of loans for fixed assets is also distributed over long periods, generally based on the duration of the pharmacy's lease which, in many cases, represents a period of 10 years. For their part, loans for the purchase of commercial buildings are established in accordance with the expected lifespan of the property and change in line with market conditions.

Ultimately, what is important is that pharmacists ensure that their enterprise's assets exceed their liabilities. Therefore, the operating line of credit — an element of liability — must be used judiciously to prevent any imbalance. "In that sense," emphasizes Monique Lo, "it is important to note that the Bank is able to restructure an enterprise's liabilities so as to rebalance its financial situation. With such balance and financial protection restored, pharmacists can pursue the healthy management of their operation."

Individuals interested in learning more about the financial services offered to pharmacists by Laurentian Bank can contact Monique Lo at [phone], extension 5046. They may also visit the Pharmacies page on Laurentian Bank's Web site at: www.banquelaurentienne.ca/en/entreprises/pme/drugstore.html

About Laurentian Bank
Laurentian Bank of Canada is a banking institution operating across Canada and offering its clients diversified financial services. Distinguishing itself through excellence in service, as well as through its simplicity and proximity, the Bank serves individual consumers and small and medium-sized businesses. The Bank also offers its products to a wide network of independent financial intermediaries through B2B Trust, as well as full-service brokerage solutions through Laurentian Bank Securities.

Laurentian Bank is well established in the Province of Quebec, operating the third-largest retail branch network. Elsewhere throughout Canada, it operates in specific market segments where it holds an enviable position. Laurentian Bank of Canada has more than $23 billion in balance sheet assets and more than $14 billion in assets under administration. Founded in 1846, the Bank employs more than 3,600 people.

For further information:

Mary-Claude Tardif
Public Relations Advisor
514 284-4500, extension 4695
[email protected]