High Risk Industries for Business Credit (SIC + NAICS Codes)

SIC and NAICS codes play a crucial role in business financing. Knowing which codes are high-risk and knowing what to focus on when choosing a code are integral to setting up your business for success.

Here’s an overview of the high-risk and low-risk NAICS and SIC codes that you should know as you seek to determine the code for your business.

High-Risk NAICS Codes for Business Financing

There are many high risk industries for business credit. Whether you’re involved in online gambling or have decided to become a collection agency, here’s a look at industries that can raise red flags for lenders.

• 424940: Tobacco Product and Electronic Cigarette Merchant Wholesalers
• 458210: Shoe Retailers
• 444110: Home Centers
• 459110: Sporting Goods Retailers
• 444120: Paint and Wallpaper Retailers
• 459120: Hobby, Toy, and Game Retailers
• 444230: Outdoor Power Equipment Retailers
• 459130: Sewing, Needlework, and Piece Goods Retailers
• 444240: Nursery, Garden Center, and Farm Supply Retailers
• 459140: Musical Instrument and Supplies Retailers
• 445131: Convenience Retailers
• 459210: Book Retailers and News Dealers
• 445132: Vending Machine Operators
• 459310: Florists
• 445320: Beer, Wine, and Liquor Retailers
• 459410: Office Supplies and Stationery Retailers
• 449110: Furniture Retailers
• 459420: Gift, Novelty, and Souvenir Retailers
• 449121: Floor Covering Retailers
• 459510: Used Merchandise Retailers
• 449129: All Other Home Furnishings Retailers
• 459999: All Other Miscellaneous Retailers
• 449210: Electronics and Appliance Retailers
• 722511: Full-Service Restaurants:
• 455110: Department Stores
• 722513: Limited-Service Restaurants
• 456110: Pharmacies and Drug Retailers
• 722514: Cafeterias, Grill Buffets, and Buffets
• 457110: Gasoline Stations with Convenience Stores
• 812930: Parking Lots and Garages
• 458110: Clothing and Clothing Accessories Retailers
• 813219: Other Grantmaking and Giving Services
• 441110: New Car Dealers
• 561510: Travel Agencies
• 441120: Used Car Dealers
• 713210: Casinos (except Casino Hotels)
• 441210: Recreational Vehicle Dealers
• 811111: General Automotive Repair
• 441222: Boat Dealers
• 811114: Specialized Automotive Repair
• 441227: Motorcycle, ATV, and All Other Motor Vehicle Dealers
• 811121: Automotive Body, Paint, and Interior Repair and Maintenance
• 441330: Automotive Parts and Accessories Retailers
• 522291: Consumer Lending
• 522390: Other Activities Related to Credit Intermediation
• 522320: Financial Transactions Processing, Reserve, and Clearinghouse Activities
• 523160: Commodity Contracts Intermediation
• 423940: Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers
• 522299: International, Secondary Market, and All Other Nondepository Credit Intermediation
• 458310: Jewelry Retailers

Low-Risk NAICS Codes

Which low risk NAICS codes are banks and other lenders looking out for? Here’s a list of industries that companies will benefit from being in the most.

• 621210: Offices of Dentists
• 484121, 484122: General Freight Trucking, Long-Distance
• 721110: Hotels (except Casino Hotels) and Motels
• 713940: Fitness and Recreational Sports Centers
• 621111: Offices of Physicians (except Mental Health Specialists)
• 561730: Landscaping Services
• 812112: Beauty Salons
• 238990: All Other Specialty Trade Contractors
• 238220: Plumbing, Heating, and Air-Conditioning
• 484110: General Freight Trucking, Local
• 236118: Residential Remodelers
• 624410: Child Care Services
• 541110: Offices of Lawyers
• 238210: Electrical Contractors and Other Wiring Installation Contractors
• 621310: Offices of Chiropractors
• 524210: Insurance Agencies and Brokerages
• 541940: Veterinary Services
• 722515: Snack and Nonalcoholic Beverage Bars
• 541990: All Other Professional, and Technical Services
• 445110: Supermarkets and Other Grocery Retailers (except Convenience Retailers)
• 812199: Other Personal Care Services
• 812990: All Other Personal Services
• 541211: Offices of Certified Public Accountants
• 112320: Broilers and Other Meat Types
• 236220: Commercial and Institutional Building Construction
• 621610: Home Health Care Services
• 445298: All Other Specialty Food Retailers
• 541330: Engineering Services
• 238910: Site Preparation Contractors
• 713990: All Other Amusement and Recreation Industries
• 236117: New Housing For-Sale Builders
• 541511: Custom Computer Programming Services

High-Risk SIC Codes for Business Financing

You should also be aware of which SIC codes banks and other lenders consider high-risk SIC codes that could get companies turned away from financing.

• 5194: Tobacco and Tobacco Products
• 5139: Footwear
• 5031: Lumber, Plywood, Millwork, and Wood Panels
• 5091: Sporting and Recreational Goods and Supplies
• 5231: Paint, Glass, and Wallpaper Stores
• 5092: Toys and Hobby Goods and Supplies
• 5083: Farm and Garden Machinery and Equipment
• 5949: Sewing, Needlework, and Piece Goods Stores
• 5261: Retail Nurseries, Lawn and Garden Supply Stores
• 5736: Musical Instrument Stores
• 5411: Grocery Stores
• 5942: Book Stores
• 5962: Automatic Merchandising Machine Operators
• 5992: Florists:
• 5921: Liquor Stores
• 5112: Stationery and Office Supplies
• 5712: Furniture Stores
• 5947: Gift, Novelty, and Souvenir Shops
• 5713: Floor Covering Stores
• 5932: Used Merchandise Stores
• 5719: Miscellaneous Home Furnishings Stores
• 5999: Miscellaneous Retail Stores, Not Elsewhere Classified
• 5064: Electrical Appliances, Television and Radio Sets
• 5812: Eating Places
• 5311: Department Stores
• 5912: Drug Stores and Proprietary Stores
• 5541: Gasoline Service Stations
• 7521: Automobile Parking
• 5136: Men's and Boy's Clothing and Furnishings
• 5137: Women's, Children's, and Infants' Clothing and Accessories
• 8399: Social Services, Not Elsewhere Classified
• 5511: Motor Vehicle Dealers (New and Used)
• 4724: Travel Agencies
• 5521: Motor Vehicle Dealers (Used Only)
• 7999: Amusement and Recreation Services, Not Elsewhere Classified
• 5561: Recreational Vehicle Dealers
• 7538: General Automotive Repair Shops
• 5551: Boat Dealers
• 7539: Automotive Repair Shops, Not Elsewhere Classified
• 5571: Motorcycle Dealers
• 7532: Top, Body, and Upholstery Repair Shops and Paint Shops
• 5013: Motor Vehicle Supplies and New Parts
• 6141: Personal Credit Institutions
• 6099: Functions Related to Depository Banking, Not Elsewhere Classified
• 6221: Commodity Contracts Brokers and Dealers
• 6082: Foreign Trade and International Banking Institutions
• 5094: Jewelry, Watches, Precious Stones, and Precious Metals
• 5944: Jewelry Stores

Low-Risk SIC Codes

Companies with these SIC codes will likely be considered for financing from banks and lenders in comparison to the above.

• 8021: Offices and Clinics of Dentists
• 4213: Trucking, Except Local
• 7011: Hotels and Motels
• 7991: Physical Fitness Facilities
• 8011: Offices and Clinics of Doctors of Medicine
• 0782: Lawn and Garden Services
• 7231: Beauty Shops
• 1799: Special Trade Contractors, Not Elsewhere Classified
• 1711: Plumbing, Heating, and Air-Conditioning
• 4212, 4214: Local Trucking Without Storage/With Storage
• 1521: General Contractors—Single-Family Houses
• 1522: General Contractors—Other Residential Buildings
• 8351: Child Day Care Services
• 8111: Legal Services
• 1731: Electrical Work
• 8041: Offices and Clinics of Chiropractors
• 6411: Insurance Agents, Brokers, and Service
• 741: Veterinary Services for Livestock
• 5461: Retail Bakeries
• 7389: Business Services, Not Elsewhere Classified
• 5141: Groceries, General Line
• 5813: Drinking Places (Alcoholic Beverages)
• 7299: Miscellaneous Personal Services, Not Elsewhere Classified
• 8721: Accounting, Auditing, and Bookkeeping Services
• 251: Broiler, Fryer, and Roaster Chickens
• 1541: General Contractors—Industrial Buildings and Warehouses
• 8082: Home Health Care Services
• 5149: Groceries and Related Products, Not Elsewhere Classified
• 8711: Engineering Services
• 1389: Oil and Gas Field Services, Not Elsewhere Classified
• 7999: Amusement and Recreation Services, Not Elsewhere Classified
• 1531: Operative Builders
• 7371: Computer Programming Services

How Much Does Industry Matter for Business Financing?

Your business industry isn’t the be-all and end-all of whether lenders determine to extend financing. There are other factors, such as your credit health, annual revenue, and time in business, for example.

That said, industry is a major factor. If you’re in an industry that prefers normal underwriting treatment, you likely won’t experience too much difficulty getting funded.

If you operate in a high risk industry or have a business that’s prohibited from receiving financing altogether, you will face some inevitable challenges.

You may have to turn to a high risk merchant (credit card processor that offers high risk payment processing to customers) and high risk loans for support with your business if your business type exists in a high risk category.

Beyond loans, you may get business credit cards with less desirable interest rates and terms. Be it loans or something else (like policies from insurance companies), however, you won’t likely have the options you want.

You may still face challenges if you are in a safe industry, however. Many lenders have quotas, which can present problems if they’ve already financed the specific number of businesses they’re looking to finance in your industry.

Regardless, always make sure you’re using the correct NAICS code. Trying to use a NAICS code to circumvent rejection could create major problems for your new business.

High-Risk NAICS Codes for Real Estate

Identifying high-risk NAICS codes for real estate can be challenging.

The NAICS Association doesn’t explicitly list high-risk NAICS codes for this industry in its most recent document. There aren’t many sources on the web featuring information on which NAICS codes for real estate will turn lenders away.

You can get a better example of risk based on business activity, however.

Operating a real estate business that handles large amounts of assets or money, invests in high-risk properties, or engages in other high-risk real estate activities will likely present a problem.

High-Risk NAICS Codes for Trucking

Trucking is an industry that can be considered high-risk. However, there are many more lower-risk NAICS codes discussed for this industry.

Certain activities, like hazardous waste hauling, are considered high-risk, but they also fall under low-risk NAICS codes like 484230. As with real estate, trucking is a nuanced industry that isn’t easy to provide exact high-risk NAICS codes for.

High-Risk NAICS Codes for Consulting

Consulting is considered to be a high-risk industry, but there are many NAICS codes that will allow you to secure business funding.

You should consider the type of consulting you’re providing, even if it falls under a safe NAICS code.

For example, offering consulting services for a high-risk business (one that sells firearms or cannabis, among other things) could be a factor that prevents you from securing business funding.

As per the above, remember that there are multiple factors beyond NAICS codes that can impact financing. Knowing all these factors as a business owner puts you in a better position to navigate challenges and recognize advantages.

High-Risk NAICS Codes for Retail

We’ve covered some high-risk NAICS codes for retail. A few of those establishments mentioned above include:

• 458210: Shoe Retailers
• 459110: Sporting Goods Retailers
• 444120: Paint and Wallpaper Retailers
• 459120: Hobby, Toy, and Game Retailers
• 444230: Outdoor Power Equipment Retailers
• 459130: Sewing, Needlework, and Piece Goods Retailers
• 444240: Nursery, Garden Center, and Farm Supply Retailers

The NAICS Association lists quite a few retailer codes as high-risk. It’s one of the industry groups that has the most risk. You can also view their full list to get an idea of what’s considered higher risk and what may affect business funding as of 2022.

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