What Is a NAICS Code — And Why It Matters for Your SBA Loan

If you’re applying for an SBA loan, one of the first—and most overlooked—factors that could impact your approval is your NAICS code. This simple six-digit number tells lenders and the SBA what industry your business is in, and it can directly influence your SBA loan eligibility, your SBSS score, and even the terms of your loan.

Understanding your NAICS code isn’t just a box to check—it could make the difference between getting approved or denied.

What Is a NAICS Code?

The North American Industry Classification System (NAICS) is a standardized method used by government agencies, banks, and the SBA to classify businesses by industry. Every business in the U.S. falls under one of these codes, which can be looked up through the NAICS Association lookup tool.

Example:

• 722511 — Full-Service Restaurants
• 541511 — Custom Computer Programming Services

While NAICS codes are mainly used for data and statistical purposes, they play a much bigger role when it comes to SBA loans.

Why Your NAICS Code Matters for SBA Loans

1. Eligibility

The SBA has restrictions on certain industries. Your NAICS code is often the first indicator lenders use to determine if your business falls into a restricted or high-risk category. The official SBA SOP outlines industries that are generally ineligible for SBA financing.

For example:

• Gambling-related businesses
• Speculative real estate investing
• Businesses engaged in illegal activities

2. Risk Tiers & SBSS Score

Your SBSS (Small Business Scoring Service) score—used in SBA 7(a) Small Loan applications—is partly influenced by your industry risk profile. If your NAICS code is associated with higher default rates, it can lower your score, even if your personal credit is strong.

3. Loan Terms & Rates

Lenders may adjust loan amounts, interest rates, or collateral requirements based on the perceived risk of your industry. Two businesses with identical revenue and credit scores could receive very different loan offers because of their NAICS codes.

How to Find or Confirm Your NAICS Code

1. Use the NAICS Association Lookup Tool to search by keyword or business activity.
2. Check your business registration documents—many states include NAICS codes in entity filings.
3. Review past tax returns—NAICS codes often appear on IRS forms such as Schedule C or corporate returns.

What to Do If Your NAICS Code Is Wrong

Sometimes, a business is classified under an incorrect or overly broad code. This can happen if:

• Your industry has changed over time
• Your business offers multiple services but was coded under a riskier one
• A lender or agency assigned the wrong code during an earlier filing

Tip: Correcting your NAICS code could improve your SBSS score and expand your SBA loan options. Updating it typically involves contacting your state business registry, the IRS, or relevant reporting agencies.

How This Affects Your SBA Loan Application

• Step 1: Check your NAICS code before applying
• Step 2: Understand your industry’s SBA eligibility
• Step 3: See how your NAICS code impacts your SBSS score
• Step 4: Adjust your loan strategy accordingly

Take the First Step — Check Your SBA Loan Score

Your NAICS code could be silently impacting your SBA loan chances. Find out where you stand today.

Check your SBA loan score now — it’s free.