SBA lenders approved 459 7(a) loans to hobby, toy and game retailers (NAICS 459120) between October 2023 and June 2026, worth $106,474,900 from 102 lenders. The median loan was $150,000, close to the national $150,300, at a median rate of 10.49% against 10.25%. What sets the industry apart is who borrows: 32.9% of loans went to start-ups and 24.6% to franchises. Lenders weigh the owner's retail experience, the franchisor's record, how much of the year's cash arrives in the holiday season, and how quickly the inventory loses value if it does not sell.
| Measure | Hobby, Toy, and Game Retailers | All industries |
|---|---|---|
| SBA 7(a) loans approved | 459 | 162,355 |
| Median loan | $150,000 | $150,300 |
| Middle half of loans | $50,000 – $250,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 3.1% | 12.9% |
| Median rate at approval | 10.49% | 10.25% |
| Middle half of rates | 9.75% – 11.25% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 24 (5.2%) | 16,849 (10.4%) |
| Median acquisition loan | $460,500 | $693,000 |
| Lenders that made these loans | 102 | 1,648 |
| SBA 504 loans (real estate, equipment) | 21 | 16,714 |
Approvals FY2024 – FY2026 to date (1 Oct 2023 – 30 Jun 2026), cancelled loans excluded. Source: SBA 7(a) and 504 FOIA loan records, as of June 30, 2026.
- SBA 7(a) loans approved
- 459 (Oct 2023 – Jun 2026)
- Median loan
- $150,000 (national $150,300)
- Median rate at approval
- 10.49% (national 10.25%)
- Start-ups
- 32.9% of loans
- Franchises
- 24.6% of loans
- Acquisitions
- 24 loans (5.2%), median $460,500
A start-up and franchise market, by SBA's numbers
NAICS 459120 covers stores selling toys, games, hobby and craft kits, models, trading cards and similar goods: independent toy shops, educational toy stores, tabletop and card game stores with play space, model and radio-control hobby shops, and branded franchise concepts in each. From FY2024 through June 2026, 102 lenders approved 459 7(a) loans to these stores, worth $106,474,900, supporting a median of 4 jobs.
| Figure | Hobby, toy and game stores | National | Reading |
|---|---|---|---|
| Median loan | $150,000 | $150,300 | A typical-sized SBA loan |
| Middle half of loans | $50,000 to $250,000 | Opening inventory, fixtures and working capital | |
| 90th percentile | $450,000 | A tight range: few loans run large | |
| Loans of $1 million or more | 14 (3.1%) | Buildings and larger purchases | |
| Median rate | 10.49% (middle half 9.75% to 11.25%) | 10.25% | Slightly above the national median |
| Fixed-rate share | 12.9% | Mostly variable | |
| Start-ups | 32.9% of loans | One loan in three funds a new store | |
| Franchises | 24.6% of loans | One in four goes to a franchise | |
| Acquisitions | 24 loans (5.2%), median $460,500 at 9.75% | 10.4% | Existing stores change hands less often |
The range is narrow. The top tenth of loans starts at $450,000, below the SBA Express limit of $500,000, and 36.4% of loans went through Express. For the median loan, the cap is the base rate plus 6%, which applies from $50,001 to $250,000. See SBA 7(a) vs SBA Express and SBA's maximum interest rates.
Not every toy store is the same credit
Lenders read the business model before the figures, because stores that share a code earn money in very different ways.
| Store type | How it earns | What the lender worries about |
|---|---|---|
| Independent or educational toy store | Product sales, heavily weighted to the holidays and birthdays | Seasonality, online price competition, the lease in a good retail location |
| Franchised toy or learning concept | Product sales under a system format, sometimes with classes or parties | The franchisor's record, franchise fees in the cash flow, the territory |
| Tabletop and card game store | Product sales plus event fees, tournaments and play space | Dependence on a few game lines and release schedules, and on a loyal community |
| Trading cards and collectibles | Sales of singles, sealed product and graded items, often online as well | Inventory priced by a market that can fall quickly, and cash sales |
| Model, craft and radio-control hobby shop | Kits, parts, supplies and repairs | Slow-moving inventory and an aging customer base |
A store that earns from events and play space has a revenue stream that does not depend on beating online prices, which lenders like. A collectibles store holding inventory whose market price moves month to month is harder to underwrite, and a lender will look closely at how the store values it on its balance sheet.
Inventory is worth less than it cost
Most of a toy store's assets sit on the shelves, and a lender values them at what they would bring in a liquidation, not what the store paid. Inventory typically advances at up to 85% of net orderly liquidation value, or roughly half of cost, and toys are a hard case: last year's licensed product, a fad that passed, and games whose new edition has shipped all lose value fast. See how lenders advance against inventory and net orderly liquidation value.
This matters twice. For an SBA loan, it means the inventory will not fully secure the loan, so the lender relies on cash flow and the owners' guarantees; every owner of 20% or more personally guarantees the loan. For the business, it means an inventory report aged by how long each item has sat is a real piece of the file, because it shows whether the owner buys well and marks down what does not sell.
A store with fast-turning, current inventory reads as a better credit than one with more stock that has sat for a year.
The holiday season and the coverage test
Many toy stores take a large share of the year's sales between Thanksgiving and New Year's, then run thin until spring. They buy inventory in late summer and fall, before the cash comes in. A year-to-date P&L through June can look like a failing business when it is a normal one.
Lenders handle this by reading full years first: SBA requires coverage of at least 1.15x, and 1.0x globally including the owners' own income and debts, measured on the year. Then they look month by month to see how the store funds its fall buying. A store that can show two or three years of monthly sales, with the holiday peak and the cash low point, answers the question before it is asked. A seasonal line of credit, or an SBA CAPLines facility, is often a better tool for the fall inventory build than a larger term loan; see seasonal lines of credit and SBA CAPLines.
Opening a store, or buying one
Opening. A start-up needs an equity injection of at least 10% of total project costs, which include the build-out, fixtures, point-of-sale system, opening inventory and working capital. The lender will want a lease that runs at least as long as the loan, a monthly projection that shows the first holiday season realistically, and evidence the owner can run a store: retail management, buying experience, or a franchisor's training behind a first-time owner. For a franchise, the franchise agreement and the franchisor's disclosures about costs are part of the file.
Buying. Only 24 loans, 5.2% of the total against 10.4% nationally, financed a change of ownership, at a median of $460,500 and a median rate of 9.75%. In a retail purchase the inventory is counted at closing and priced separately, and the lender will ask whether the store has enough working capital for its first fall buying season under the new owner. SBA requires an independent valuation where the amount financed, less appraised real estate and equipment, exceeds $250,000; a seller note counts toward up to half of the 10% equity only on full standby for the life of the loan; SBA prohibits an earnout. From 1 October 2026, a change of ownership must show 1.25x coverage on historical results. For buying a franchised store, see franchise resale financing and working capital at close.
Real estate, online sales and the file
SBA 504 financed 21 projects at a median of $561,000; it is the route for an owner buying the building the store occupies. 504 typically splits a project 50% bank, 40% CDC and 10% borrower (15% for a new business), and the owner must occupy at least 51% of an existing building. See SBA 7(a) vs SBA 504.
Stores that also sell online through marketplaces should show those sales separately, with payout reports that tie to the return. Retailers with card-heavy sales are also frequent targets for merchant cash advances, which SBA will not refinance while active; see refinancing cash advances for retailers.
The file starts with SBA's standard list: business tax returns for 2–3 years, a P&L and balance sheet with a year-to-date P&L through last month-end, a debt schedule, and personal tax returns and a personal financial statement for each owner of 20% or more. For a toy or game store, add:
- Monthly sales for two or three years, so the holiday peak and the low point are visible
- An inventory report by category and age, and the store's markdown practice
- Sales by channel: store, events and online
- The lease, and for a franchise the franchise agreement
- The owner's resume, supporting Form 1919's management experience
Transparent builds the full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in. On SBA loans the lender pays Transparent, not the borrower. See the package.
Common questions
- Can I open a toy store with an SBA loan?
- Yes. Start-ups took 32.9% of SBA loans in this industry from October 2023 to June 2026. Expect to put in at least 10% of total project costs, including opening inventory, and to show retail or management experience, a lease and a realistic monthly projection.
- Do lenders finance toy and game franchises?
- Franchises took 24.6% of loans in this industry. The lender reads the franchise agreement and fees as part of the cash flow and weighs the franchisor's record alongside the owner's.
- Why doesn't my inventory cover the loan?
- Lenders value inventory at what it would bring in a liquidation. It typically advances at up to 85% of net orderly liquidation value, or roughly half of cost, and trend-driven toys lose value quickly.
- My store loses money most months. Can it still qualify?
- It can, if the full year covers the payments. Lenders test coverage on the year, at least 1.15x for SBA, then look at monthly sales to see how the store funds its fall buying and reaches the holidays.
- How large are SBA loans to toy and game stores?
- The median was $150,000, with the middle half from $50,000 to $250,000 and the top tenth starting at $450,000. Only 14 loans reached $1 million or more.