Very few people buy a franchise with cash. Most fund it with a mix of their own money, a bank loan and one or two other sources, and the mix decides how much they can borrow and on what terms. This guide walks through the main routes, what lenders look for, and how a kids franchise budget actually gets funded.
Start With the Number You Need
Item 7 of the franchise disclosure document is your shopping list. For an indoor inflatable park, Funbox files a total of $855,000 to $1,630,000, broken into fifteen lines from the franchise fee to two months of working capital. The full line-by-line budget is in the guide to what it costs to open.
Two things matter before you talk to a lender. First, the range assumes you rent the building, so buying property is a separate, much larger financing question. Second, the total does not include an owner’s salary or loan costs, so you need personal reserves on top of it.
Check Whether the Franchisor Offers Financing
Item 10 of the disclosure document says whether the franchisor offers financing and on what terms. Many do not. Funbox’s filing, for example, states plainly that it does not offer direct or indirect financing and does not guarantee a franchisee’s loans or leases. That is common, and it means the money comes from outside the system.
Route 1: SBA-Backed Bank Loans
The U.S. Small Business Administration’s loan programs are the most common way first-time franchise owners borrow. The SBA does not lend directly. It guarantees part of a bank’s loan, which makes the bank more willing to lend to a new business.
7(a) loans. The general-purpose program, covering build-out, equipment, working capital and franchise fees, up to $5 million.
504 loans. Built for fixed assets such as real estate and long-life equipment, typically combining a bank loan with a certified development company loan. Less useful for a leased space, more useful if you buy the building.
Lenders check franchise brands against the SBA Franchise Directory, which the SBA reinstated in June 2025 and which lists brands whose agreements meet its eligibility rules. Ask any franchisor whether it is listed before you apply.
Route 2: Equipment Financing and Leasing
Play structures, arcade games and point-of-sale systems can often be financed separately from the main loan, with the equipment itself as collateral. The Funbox filing explicitly allows arcade games to be leased through an approved program, which lowers the cash needed at opening. Equipment loans usually carry shorter terms than an SBA loan, so they raise monthly payments even as they reduce the upfront bill.
Route 3: The Landlord
A tenant-improvement allowance is the most overlooked source of funding in the budget. Landlords often contribute to the build-out for an entertainment tenant that brings families and weekend traffic. Because leasehold improvements are the largest single line in an indoor park’s budget, $300,000 to $650,000 in the Funbox filing, even a partial allowance changes how much you need to borrow. Negotiate it before you sign the lease, not after.
Route 4: Your Own Money
Every lender expects you to put in some of your own money, often called the equity injection. For SBA startup loans, the SBA’s current rules set a minimum of 10 percent of the project, and many lenders ask for more for a new venue. Common sources are savings, a home equity loan, and a rollover of retirement funds into the business, sometimes called ROBS (rollovers as business startups). A ROBS structure lets you use retirement savings without an early-withdrawal penalty, but it carries strict rules and real risk to your retirement, so it needs a specialist and a tax adviser.
Route 5: Partners and Investors
Some buyers bring in a partner who contributes capital, operating experience or both. Others raise money from family or private investors. Both work, but both change who controls the business. Put the ownership split, decision rights and exit terms in writing, and check the franchise agreement, because most franchisors must approve every owner.
What Lenders Want to See
A business plan with a realistic revenue ramp, a monthly cash flow for at least 24 months and a clear use of funds. The business plan template is built for this.
The disclosure document, especially Items 7, 19 and 20, which give the lender the franchisor’s published budget, any earnings data and the system’s track record.
Your experience, in management, hospitality or running a business. Lenders lend to operators as much as to concepts.
Your personal finances, including credit, assets and the reserves you will keep outside the business.
A signed or near-final lease, because the site and rent drive every number in the plan.
Putting the Stack Together
A typical kids-venue deal combines three or four of these routes. Your equity covers the injection and early reserves. An SBA 7(a) loan funds most of the build-out and equipment. A tenant-improvement allowance takes a bite out of construction. Equipment leasing covers arcade games. The right mix depends on your cash, your credit and your market, which is why it is worth talking to two or three lenders who have funded franchises in the same category before.
Frequently Asked Questions
Can I get an SBA loan for a franchise?
Yes, if the brand meets SBA eligibility rules. Lenders check the SBA Franchise Directory. The 7(a) program is the most common choice, up to $5 million.
How much of my own money do I need?
For SBA startup loans, at least 10 percent of the project under current SBA rules, and often more. You also need personal reserves, because startup budgets exclude your salary.
Does Funbox offer financing?
No. Its 2026 disclosure document states that it does not offer direct or indirect financing or guarantee franchisees’ loans or leases.
Can I use my retirement savings?
Yes, through a rollover structure, but it carries strict rules and risk to your retirement. Use a specialist and a tax adviser.
What is the biggest line to finance?
The build-out. For an indoor inflatable park, leasehold improvements run $300,000 to $650,000, and a landlord allowance can reduce it.
Next Step
Price the project from Item 7, decide how much of your own money you will commit, and take a business plan to two or three lenders who know the category. The due-diligence checklist covers the rest of your homework. If an inflatable park is on your shortlist, ask the Funbox franchise team for the current FDD so your lender has the real numbers.
Sources
1. Funbox Franchise, LLC, 2026 Franchise Disclosure Document, issued 2 April 2026, Items 7 and 10. https://dfpi.ca.gov/search-result-detail/?id=564837&type=org
2. U.S. Small Business Administration, loan programs. https://www.sba.gov/funding-programs/loans
3. U.S. Small Business Administration, SBA Franchise Directory. https://www.sba.gov/document/support-sba-franchise-directory
4. U.S. Small Business Administration, SOP 50 10 8 (effective June 2025), as summarized by SBA lenders, for the 10 percent minimum equity injection for startups.
