Second Position Merchant Cash Advance for Independent Pharmacies
A second position merchant cash advance gives an independent pharmacy more working capital while a first advance is still running, usually to cover the gap between paying the wholesaler and getting reimbursed by pharmacy benefit managers. Funders size it on what front-store sales and PBM deposits leave after the first debit, so the combined daily payment has to fit the reimbursement cycle.
Why do pharmacies end up needing a second position?
Reimbursement lags behind the wholesaler bill
The wholesaler bills on short terms, while PBM reimbursements arrive on their own cycle, often weeks after the prescription goes out. A first advance covers one gap, and a new brand-name launch or a jump in specialty scripts opens another before the first one is paid down.
Clawbacks and adjustments
PBM audits and after-the-fact fee adjustments take money back from deposits that already looked final. A month with a large adjustment leaves less cash than the script count suggests.
What two advances take in a slow month
Say an independent pharmacy at $250,000 a month already sends $25,000 monthly to its first funder, then adds $75,000 at 1.45 over 6 months, about $18,120 more.
| Month | Deposits | First advance only | Both advances |
|---|---|---|---|
| An average month | $250,000 | 10.0% | 17.2% |
| A slow month, 25% under average | $187,500 | 13.3% | 23.0% |
A slow month is the test: 23.0% gone before rent or payroll. With a 3.4-point yearly range in BLS employment for pharmacies and drug retailers (NAICS 456110), the slow month to test is the one on your statements.
How do funders read a pharmacy file with an advance already open?
They separate PBM remittances, front-store card sales and cash, then subtract the first funder's daily debit. What remains is the room the second position has to fit into. A pharmacy whose PBM deposits arrive steadily and whose wholesaler account is current reads far better than one already on credit hold.
What helps the second offer
- Recent PBM remittance reports that match the bank deposits.
- A wholesaler statement showing the account is current.
- The first funder's contract and current balance.
When is a second position the wrong move?
When the first advance already takes a heavy share of deposits, a second debit squeezes the account on every slow reimbursement week. In that case a consolidation of the first balance, or waiting until it's mostly paid down, usually costs less than stacking.
Quick answers
Can a pharmacy get a second MCA while one is open?
Yes, when deposits leave room after the first debit. Funders read PBM remittances and front-store sales separately, subtract the existing payment, and size the second position on what's left. A current wholesaler account and the first funder's balance letter help. If the first payment already strains the account, a consolidation is usually the better fit.
Do PBM clawbacks hurt a pharmacy's second position offer?
They lower it when they're large. Funders look for adjustments and recoupments on the remittance reports, because those take back money that looked final in the bank account. A pharmacy that shows the adjustments clearly and still has steady deposits after them gets a cleaner read than one whose reports don't match the statements.
Does the wholesaler need to know about a second advance?
The advance doesn't require it, but the wholesaler's terms matter. Some wholesaler agreements have covenants about other financing or a security interest in inventory. Read the agreement before signing, and tell your broker about any lien the wholesaler holds so the second funder's filing doesn't conflict with it.
More for independent pharmacies
- Same-day merchant cash advance for independent pharmacies
- MCA consolidation for independent pharmacies
- Revenue-based financing for independent pharmacies
- Business line of credit for independent pharmacies
- How funders read independent pharmacies
- Second position MCA: how it works
Run your own numbers with the stacked payment calculator.
Want to see what fits an independent pharmacy like yours?
Tell us your slow months and your open advances, and we'll shop the file with funders whose programs fit. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.