Some may recall a television advertisement where a banker is at a BBQ, and the participants grow very silent when he announces what he does for a living, but there is then a collective sigh of relief when he proudly announces the bank he works for.

Whilst the advertisement has provided a great deal of amusement and laughs, the underlying intent is that the bank mentioned is a differentiated player and provides a safer pair of hands than the majority.

As with most industries, most customers have had a poor experience at some time with their bank, and often this is what drives refinance activity – certainly a number of customers that we get an opportunity to talk with was as a result of them believing they were not getting the best deal or their bank was not responding to their needs or worst of all, they felt their bank did not understand them.

Whilst these complaints can arise from any type of business, the more specialised the business and subsequently their banking requirements, the more critical that the right fit is found between customer and banker.

Pharmacy lending is classed as one of the more specialised types of lending. This is for a number of reasons, but predominantly as the bank’s primary (and in some cases only) security is the business itself, there is a requirement for the bank to regularly monitor the financial performance of the business. In addition, there are a number of variables related to pharmacy lending where experience and a knowledge of the industry is critical to understanding the individual businesses, what the numbers are telling you and what the risks are. An understanding of GP, key expense ratios, impact of leasing on terms, supplier terms and interplay, impact of legislative change – e.g. generic substitutions etc – will arm a potential banker much better than one who might be looking at their first pharmacy transaction.

More importantly, the worth of your banker is tested when you need them most – if your circumstances change and you need your bank’s support. Having someone in your corner who has a good understanding of the industry and depth of experience will give you the best opportunity of navigating through. In this way, a good banker should almost be considered as a trusted business partner to your business.

So, what differentiates a good banker? Here are some questions you might pose to get a sense:

  • How long have they been in Business Banking, but in particular pharmacy lending?
  • How big is there current portfolio and how often would you expect to hear from them?
  • Do they currently bank many other pharmacies?
  • What involvement will they have with you post settlement and ongoing?
  • What support will you have for your non-lending related requirements in running your business?

Most good bankers will have a number of advocates in their client base who are prepared to endorse and refer them, so if you find a banker whose existing customers are prepared to sing their praises, that is possibly the best endorsement of all!

For more information on Suncorp’s Pharmacy Lending, please contact:

Tanya Mehinagic on 0459 808 331 or tanya.mehinagic@suncorp.com.au
Larry Pumpa on 0418 886 459 or larry.pumpa@suncorp.com.au