NAICS codes and business loans: restricted and high risk codes

Your NAICS code is one of the first things a lender reads. It decides whether the lender funds your industry at all, how it prices the risk, which products it offers and, for SBA loans, whether you count as small. A correct code puts your file in front of lenders with appetite for your industry. A wrong or restricted code can stop the file before anyone reads the bank statements.

Not sure of your code? Describe the business in the NAICS code calculator and it returns the code in a few seconds.

How lenders use your NAICS code

Most lenders, from banks to online lenders, run four checks off the code.

Appetite lists are written in NAICS codes because the codes are precise. A lender might fund 238220 (plumbing and HVAC contractors) but decline 238910 (site preparation) because of how equipment heavy and seasonal it is. It might take 722511 (full service restaurants) with two years in business but decline 722410 (bars) outright.

SBA ineligible industries

The SBA's ineligible list is in 13 CFR 120.110. It is defined by activity, not by code, but in practice lenders map it to NAICS codes. The main categories:

Cannabis deserves a note. Because marijuana remains illegal under federal law, SBA policy treats businesses that grow, process or sell it as ineligible, and that extends to businesses that derive revenue from serving them directly, such as dispensary landlords. Hemp that meets the federal definition is a different case.

Passive real estate is the other common surprise. A business that owns a building and leases it to its own operating company can qualify through an eligible passive company structure. A landlord that leases to unrelated tenants cannot.

Industries lenders treat as high risk

Outside the SBA list, private lenders keep their own restricted lists. These vary by lender, but the same industries come up again and again:

• Restaurants and bars (722511, 722513, 722410), for thin margins and high failure rates.
• Trucking (484110, 484121, 484230), for fuel swings and owner operator concentration. See our trucking NAICS guide.
• Construction specialty trades (238 series), for project risk and slow receivables.
• Auto dealers (441110, 441120), for floor plan exposure.
• Nonprofits and religious organizations (813 series), for revenue structure.
• Financial services such as debt collection (561440), check cashing and payday lending (522390).
• Firearms, adult entertainment, crypto and cannabis, often for reputational or regulatory reasons.

Being on a restricted list at one lender rarely means you are restricted everywhere. It means the lender pool is smaller and the match matters more.

Which codes get the best terms

Lenders like industries with steady revenue, low failure rates and assets that hold value. Codes that tend to see the widest lender appetite and best pricing:

How an AI brokerage reads your code

At Levr, the code is one of the first signals the matching engine reads. It checks your code against each lender's appetite list, removes lenders that decline your industry, ranks the rest on how they price your code at your revenue and time in business, and then layers in the deal details. The result is a short list of lenders that actually fund your industry, instead of a blind submission to lenders who will decline on code alone. Start an application and the AI matches the deal to lenders that fund your code.

What to do if your industry is restricted

A restricted code narrows your options, but it does not close them. Products that underwrite an asset or a receivable care less about the industry.

Specialist lenders also exist for most restricted trades, including trucking, restaurants, construction and auto.

Do not pick a code to get around a restriction

Choosing a NAICS code that does not match what the business does is misrepresentation. Underwriters compare the code to your bank statements, website, invoices and tax returns. A mismatch gets caught, and once it does the application is finished with that lender. If your current code is genuinely wrong, fix it everywhere using our guide on how to change your NAICS code.

Size standards for SBA loans

For SBA loans, your NAICS code also sets the size standard you must meet, measured in average annual receipts or employees. Most applicants pass easily, and SBA 7(a) and 504 borrowers can also qualify under the alternative size standard of $20 million in tangible net worth and $6.5 million in average net income. Our page on SBA size standards by NAICS code has the details.