Low-Risk NAICS Codes (Plus SIC Codes)

The North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC) standards sort businesses into industries based on their economic activities, assigning them six-digit codes and four-digit codes, respectively. When you apply for business financing, lenders may ask for an NAICS or SIC code to help them classify your company, which can significantly affect your chances of qualifying for financing.

Here are some codes you should know, including low-risk NAICS codes that could help you qualify for business financing, if your company matches the description.

Low-Risk NAICS Codes for Business Financing

All other factors being equal, lenders are more willing to offer financing to businesses in industries they consider to be lower risk. Preferred industries can vary between creditors, but some consistently receive more funding than others.

Here are the low-risk NAICS codes for some of the industries that received the highest volume of Small Business Administration (SBA) loans between 2010 and 2019:

• 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 NAICS Codes

Fortunately, the NAICS Association cooperated with various professionals in the banking industry to publish a list of certain NAICS codes it considers high-risk.

Here’s its updated list of high-risk industries and their codes:

• 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

Businesses in these industries may have a harder time securing business financing, even with strong credit and finances.

Low-Risk SIC Codes

While the NAICS has largely replaced the SIC, which hasn’t been updated since 1987, some lenders and other business databases still use the older classification system.

Here are the equivalent SIC codes and categories for the NAICS industries mentioned above that receive the highest SBA loan approval numbers:

• 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

High-Risk SIC Codes

Here are the equivalent SIC codes and classifications for the NAICS Association’s list of high-risk industries

• 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

How Much Does Industry Matter for Business Financing?

Next to your credit and financial history, your company’s industry is one of the most significant factors in determining your ability to qualify for business financing. Lenders tend to have strong preferences for and against certain types of organizations.

Generally, lenders break industries into the following tiers:

Preferred: These businesses receive preferential underwriting treatment, such as more favorable financing terms and streamlined application processing times. Normal: These businesses receive normal underwriting, with neither positive nor negative adjustments. High-Risk: Businesses that a lender considers high-risk can still qualify for financing, but they’ll face steeper underwriting requirements and may receive less favorable terms. Prohibited: Lenders don’t provide financing to businesses in prohibited industries under any circumstances, even if they’re well-qualified in other ways. They may not even accept applications from them.

However, your industry impacts more than just the underwriting requirements you face. Lenders often look to spread their loans across multiple industries to limit their exposure to the risks associated with them. Think of it as diversifying their portfolio.

For example, if a financial institution has already reached its quota for dental offices, you may not be able to get a business loan from it as a dentist, even if the industry is one they prefer and you have the necessary credit scores and financial qualifications.

All that said, you shouldn’t choose an inaccurate NAICS or SIC code to trick a lender into offering you financing. If you default on the loan and the lender discovers your deceit, it could constitute fraud, and you could be subject to fines or prison time.

When applying for business loans, don’t provide a number that you know isn’t the right NAICS code for your company. If you suspect you fall under a high-risk NAICS code, look for a niche lender that’s willing to work with your specific industry.

Low-Risk NAICS Codes for Real Estate

Real estate NAICS codes can be found in Sector 53, Real Estate and Rental and Leasing. Here are some NAICS codes for businesses in the real estate industry that lenders may be less likely to consider high-risk.

• 531190: Lessors of Other Real Estate Property
• 531320: Offices of Real Estate Appraisers:
• 531390: Other Activities Related to Real Estate
• 531210: Offices of Real Estate Agents and Brokers
• 531312: Nonresidential Property Managers
• 522292: Real Estate Credit
• 531311: Residential Property Managers
• 541191: Title Abstract and Settlement Offices
• 237210: Land Subdivision
• 531120: Lessors of Residential Buildings and Dwellings
• 541990: All Other Professional, Scientific, and Technical Services
• 524127: Direct Title Insurance Carriers
• 523991: Trust, Fiduciary, and Custody Activities

Low-Risk NAICS Codes for Trucking

Trucking NAICS codes primarily fall under Sector 48, Transportation and Warehousing. Here are some trucking NAICS codes that lenders may favor:

• 484230: Specialized Freight (except Used Goods) Trucking, Long-Distance
• 484121: General Freight Trucking, Long-Distance, Truckload
• 484122: General Freight Trucking, Long-Distance, Less Than Truckload
• 484220: Specialized Freight (except Used Goods) Trucking, Local
• 484110: General Freight Trucking, Local
• 488490: Other Support Activities for Road Transportation
• 484210: Used Household and Office Goods Moving

Low-Risk NAICS Codes for Consulting

There are countless types of consulting businesses, but one of the broadest and potentially least offensive categories to lenders is Sector 54, Professional Scientific, and Technical Services. Here are some of its NAICS codes:

• 541611: Administrative Management and General Management Consulting Services
• 541612: Human Resources Consulting Services
• 541613: Marketing Consulting Services
• 541614: Process, Physical Distribution, and Logistics Consulting Services
• 541618: Other Management Consulting Services
• 541620: Environmental Consulting Services
• 541690: Other Scientific and Technical Consulting Services
• 541330: Engineering Services
• 541810: Advertising Services
• 541512: Computer Systems Design Services
• 541420: Industrial Design Services
• 541320: Landscape Architectural Services

Low-Risk NAICS Codes for Retail

Since there are so many different types of retail businesses, they don’t fall into any single NAICS sector. Here are some codes for lower-risk retail businesses that sell various types of products:

• 445110: Supermarkets and Other Grocery Retailers (except Convenience Retailers)
• 445298: All Other Specialty Food Retailers
• 455219: All Other General Merchandise Retailers
• 456130: Optical Goods Retailers
• 445292: Confectionery and Nut Retailers
• 456191: Food (Health) Supplement Retailers
• 459420: Gift, Novelty, and Souvenir Retailers
• 459910: Pet and Pet Supplies Retailers

How FairFigure Can Help

Your industry, as evidenced to lenders by your SIC or NAICS code, plays a significant role in your application for business financing, but there’s only so much you can do to change it.

It’s not a good idea to adopt a low-risk NAICS code if it means lying to a lender about your business’s nature.

However, your business credit impacts your chances just as much, if not more, and there are many opportunities to improve it.

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We’ll report the subscription as a vendor tradeline and the FairFigure Capital Card as a financial tradeline, adding two accounts to your business credit reports for the price of one.

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