PHARMACY owners across Australia are increasingly breaching lending covenants on their loans, as the impact of PBS reforms continues to bite, according to Mark Churchill from Allfin Financial Services.
"The major market shift caused by the PBS reforms is hurting everyone," Churchill said, with some clients reporting shortfalls of up to $150,000 over a 12 month period.
Breaching loan covenants can see banks raise interest rates by as much as 2%, request a valuation of the pharmacy and possibly require the repayment of large debts.
Churchill said Allfin would be reviewing more client covenants, saying "we are expecting there to be a flux of breaches across the pharmaceutical industry".
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