A Comprehensive List Of NAICS Codes To Watch Out For

by Theiana Rose Dec 26, 2023

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A Comprehensive List Of NAICS Codes To Watch Out For

Navigating the world of business financing can be a complex endeavor, particularly when it comes to understanding how classification codes like the list of high risk NAICS codes might influence your company's access to credit lines or loans.

Many entrepreneurs and small business owners are often unaware that the North American Industry Classification System (NAICS) code assigned to their businesses could significantly impact funding opportunities.

One important fact about these classification systems is that SIC and NAICS codes differ; while SIC has been around since the 1930s, NAICS took its place in 1997 for use by federal statistical agencies for collecting, analyzing, and publishing statistical data related to the U.S. economy.

Knowing which category your venture falls under can shape your funding prospects and even insurance premiums and credit limit considerations.

Our article is crafted as a tool to guide you through the maze of NAICS codes, emphasizing those deemed high-risk by lending institutions. By clarifying this topic, we aim to help you make informed decisions about your business classification—decisions that can open doors rather than close them.

And who doesn't want more doors open? Keep reading; there's much more useful information ahead!

Key Takeaways

  • NAICS codes tell what your business does. The right code helps you get loans and other money.
  • Some NAICS codes are high-risk, like those for casinos or pawn shops. High risk can make getting funds hard.
  • To find your NAICS code, check the official website or ask a pro like an accountant.
  • Codes change over time, so it's smart to keep checking if yours is up-to-date.
  • If you have a low-risk code, banks might like that better and offer good loan terms.

Understanding NAICS and SIC Codes

Understanding NAICS and SIC Codes serves as a foundation for grasping the framework of industry classification that supports various aspects of business operations, from analysis to compliance.

While both systems categorize economic activities, NAICS codes have largely replaced SIC codes in many applications due to their updated structure and more detailed sector representation.

Differences between NAICS and SIC

NAICS codes have more digits than SIC codes, meaning they can give much more information. NAICS codes are six-digit numbers and are used to collect stats about the U.S. economy.

This system came after SIC codes and gives a better look at what companies do today. Unlike the older four-digit SIC codes that show a business's main job for tax reasons, NAICS digs deeper into how businesses work.

The difference between these two systems is big because it helps people know exactly what each company does. Using the right code makes things clearer for reports and getting money for your business.

Now, let's talk about why these NAICS codes matter so much when it comes to financing your company!

Purpose of NAICS Codes

NAICS codes play a big role in how businesses are seen and understood. These codes tell what main activity a business does. They help banks, insurance companies, and other places that give money to determine if a business is doing well and can be trusted with loans or credit.

Getting the right NAICS code can ensure you don't get turned down when asking for money.

After knowing the purpose of these codes, let's see how they touch on getting funds for your company.

NAICS Codes and Business Financing

NAICS Codes and Business Financing

NAICS codes not only categorize businesses but also have significant implications for financing; lenders often consider these classifications when evaluating loan applications. A business's NAICS code can influence funding decisions, with certain industries deemed higher risk than others by financial institutions.

The impact of NAICS on funding approvals

Banks and lenders often check your NAICS code when you ask for money. Your business might refuse your request if it has a high-risk NAICS code. High-risk codes can lead to higher interest rates or lower credit limits, too.

Using the right NAICS code is important because it shows how risky your business might be. For example, businesses like carwashes or general merchandise stores have certain codes that could make getting loans harder.

On the other hand, having a low-risk code can help you get better funding options.

High-risk NAICS Codes that could lead to denial

NAICS codes can shape how banks and lenders view your business. They may use these numbers to judge whether lending you money is risky.

  • Certain NAICS codes might make getting a business loan harder.
  • If your industry is considered high-risk, lenders might say no to your loan application.
  • 66000: This applies to companies dealing with money, like banks and credit unions. They face strict rules.
  • 66001: This code is for investment firms. It can signal big risks due to market changes.
  • 66002: Insurance agencies fall under this number. They handle lots of claims and can have financial ups and downs.
  • 66003: Real estate agents come here—their income changes with the housing market, which isn't always stable.
  • 66004: Mortgage brokers use this code. They work in an industry where loan payments sometimes don't get made on time.
  • 66040: This one's for pawn shops. They trade used goods for cash, which can be tricky business.
  • 660440: Automotive dealers have this code. Selling cars involves big money and sometimes loans don’t get paid back.
  • 660444: Casinos carry this number because they deal with lots of cash and gambling risks.
  • 660450: Liquor stores are marked by this code; they have special laws they must follow which adds risk.
  • 660500: Restaurants get this NAICS code. The food industry can be tough with lots of competition.

Identifying Your NAICS Code

Determining the correct NAICS Code for your business is a crucial step in aligning with industry standards and ensuring accurate representation in economic data. This code not only reflects your primary business activities but also plays a significant role in compliance, reporting, and eligibility for sector-specific opportunities.

How to find your business's NAICS Code

Finding the right NAICS code for your business is a key step. It helps with getting loans and setting up the right services.

  • Start with the official website for NAICS codes. This is where all codes are listed and explained.
  • Use the search function on the site. Type in keywords related to your business activities to see matching results.
  • Look at your business paperwork. Sometimes, your tax forms or business licenses already have a NAICS code on them.
  • Ask industry associations. Many trade groups know the common NAICS codes for businesses like yours.
  • Check with government agencies that you work with. They often require a NAICS code for records or permits.
  • Consult a professional accountant or business advisor. They have experience in identifying correct codes for different businesses.
  • Review competitor's codes. See what similar companies use but make sure their primary activities match yours.
  • Think about your main source of income when choosing a code. The primary activity of your business determines its NAICS code.
  • Consider multiple codes if you have diverse operations. Some businesses need more than one NAICS code to cover all their activities.
  • Double-check before deciding on a code. Make sure it accurately reflects what your business does.

Resources for NAICS Code lookup

Now that you understand the importance of identifying your business's NAICS Code let's explore where you can look it up. Finding the right code is key to classifying your business correctly.

  • Visit the official NAICS Association website. They have a search tool where you can enter keywords related to your business.
  • Check out the U.S. Census Bureau site. It offers a detailed NAICS search engine for all current codes.
  • Look at your business tax return forms. Sometimes, they include the NAICS Code used in past filings.
  • Ask industry trade associations. These groups often know common codes for businesses like yours.
  • Use an online store or company that specializes in selling business data. They may offer lists of codes based on industry.
  • Contact a professional accountant or lawyer familiar with your sector. They can often provide guidance on choosing the right code.

High-Risk NAICS Codes to Be Aware Of

Understanding the landscape of high-risk NAICS codes is essential for business owners and investors, as these classifications have significant implications for financial risk assessment and lending decisions.

Awareness of such high-risk categories helps navigate potential funding challenges and align with industries more favorable to fiscal health and growth opportunities.

List of high-risk industries

NAICS codes help us know which industries are out there. Some industries have more risks than others. Here is a list of high-risk industries:

  • Casinos: They deal with lots of cash and can face strict rules.
  • Pawn shops: They lend money for items and deal with stolen goods.
  • Liquor stores: These places sell alcohol and are often watched closely by the law.
  • Automotive dealers: They sell cars, which is a big business with lots of money involved.
  • Restaurants: Food places can sometimes be risky because they may not make enough money.
  • Check cashing agencies: These places handle personal checks, which can be tricky.
  • Petroleum refining: Making oil products has environmental and safety concerns.
  • Gaming activities: Like casinos, these involve gambling and lots of cash.

Reasons why these codes are considered high-risk

High-risk NAICS codes often point to industries with a lot of money or strict laws. Think about places like casinos and pawn shops. They handle lots of cash daily, which can be tough to track.

This makes it hard for banks to check if the money is clean. That's why sometimes they say no when these businesses ask for loans.

Other times, the danger comes from what the business sells or does. Selling guns or making oil can cause big problems if something goes wrong. These kinds of jobs also have a lot of rules from the government, so there’s more chance something could go wrong legally too.

Banks don’t want trouble, so they might not lend money to these risky businesses either.

Cash-Intensive Businesses and NAICS Codes

Cash-intensive businesses, such as laundromats and car washes, often fall under specific NAICS Codes that signal higher scrutiny from financial institutions. These codes are pivotal for regulators and lenders in identifying potential risks associated with large volumes of physical currency transactions.

NAICS Codes associated with cash-heavy industries

NAICS codes help classify different businesses. Some of these codes are for businesses handling a lot of cash daily.

  1. Casinos (NAICS Code 713210): They deal with lots of money from games and betting.
  2. Liquor Stores (NAICS Code 445310): These shops sell alcohol and often have a lot of cash sales.
  3. Automotive Dealers (NAICS Code 441110): Car sales can involve large cash transactions.
  4. Pawn Shops (NAICS Code 522298): Customers trade items for money, dealing mostly in cash.
  5. Restaurants (NAICS Code 722511): Eateries collect daily cash from dine-in and take-out services.

Additional scrutiny for cash-intensive business codes

Businesses with lots of cash face more checks from lenders and credit agencies. Banks and other money lenders look closely at these companies because they have a higher chance of problems like theft or money laundering.

The extra attention helps make sure the business can handle its cash safely.

Industries known for handling a lot of cash, like some restaurants or retail stores, may find it harder to get loans. This is because their NAICS codes are on the list of high risk naics codes.

Lenders might say no to giving them money, or they might charge more interest. They do this to protect themselves in case of trouble in these industries which makes it hard for the businesses to repay the loans.

Low-Risk NAICS Codes for Business Credit

Discovering low-risk NAICS codes can be a boon for businesses seeking credit. These industry classifications often have a track record of stability and lower default rates, making them more attractive to lenders and investors looking to minimize risk.

Examples of low-risk industry codes

NAICS codes help to know what kind of work a company does. Some codes mean the company is less risky for business loans or venture capital.

  • Plastic Products: Companies that make things from plastic often have a steady need for their goods. They are seen as stable by people who lend money.
  • Telephone Communications: Businesses in phone services keep customers connected. They usually make money all the time, which is good for getting funds.
  • Groceries: Stores that sell food are important for everyone. Since people always need to eat, these businesses are less risky.
  • Insurance Services: These companies offer protection, like health or car insurance. They're needed by many and can be safer bets for loans.
  • Computer Programming: With more things going digital, programmers are in demand. This field can be more secure for investing.
  • Entertainment Groups: People like to have fun and relax. So entertainment businesses often do well and aren't too risky for lenders.

Benefits of having a lower-risk NAICS Code

Having a lower-risk NAICS code can help your business in many ways. Banks and lenders often like these codes because they come with less risk. This means you might get a loan easier, have higher credit limits, or pay less for insurance.

For example, if you run an entertainment group or create computer programs, you're seen as safer to invest in compared to high-risk industries.

Choosing the right NAICS code doesn't mean being sneaky or wrong. It's smart to pick a code that fits your business but also looks good to those who lend money or support businesses with funds.

This way, when people look at what kind of company you are, they see something stable and trustworthy. It can open doors to more opportunities for growth and funding for your plans.

NAICS Codes: The Language of Business Classification

NAICS codes serve as a standardized numerical method for categorizing businesses into specific industries, essentially becoming the dialect through which organizations communicate their primary activities.

This classification system plays a critical role, providing insights that influence strategic decision-making and competitive positioning within the marketplace.

The role of NAICS in industry classification

Industry classification is a big deal for businesses. The North American Industry Classification System, or NAICS, sorts companies based on what they do. It's like putting books on the right shelf in a library so people can find them easily.

This system helps everyone understand different types of work and how they connect.

Having the right NAICS code can also make things smoother when a business tries to get money to grow. Banks and lenders look at these codes to decide if a company might be too risky to lend money to.

Some codes could even stop a business from getting any funding because they are labeled high-risk industries.

How businesses can leverage NAICS for strategic advantage

Businesses can use NAICS codes to understand and find their place in the market. Knowing your code helps you see how you match up with other companies like yours. This info can guide your strategy, like figuring out who your competitors are, or finding new customers.

It also helps when seeking funds or credit by showing lenders that you're in a solid industry.

Companies often pick a NAICS code that fits their main money-making activity. But it's smart to think about all parts of your business when choosing a code. A well-chosen NAICS code might help get lower insurance costs or better loan terms because it shows less risk to bankers and insurers.

Use the codes wisely, and they can give you an edge over others who may not pay as much attention to this detail.

Avoiding High-Risk NAICS Codes

Selecting the right NAICS code is crucial, as it not only affects how a business is viewed by lenders and investors but also influences the potential risk profile attached to the company.

Entrepreneurs should carefully choose codes that accurately represent their operations while considering the implications of being associated with high-risk categories.

Strategies for choosing lower-risk business names and codes

Picking the right business name and code can help you get funding. It's important to choose names and codes that look safe to lenders. Here are steps you can take:

  1. Learn about NAICS codes: These codes tell what your business does. There are books and websites that explain them.
  2. Use the NAICS website: You can search for your business type and find the best code.
  3. Consider low-risk industries: Some codes, like those for computer programming or groceries, show your business is less risky.
  4. Avoid high-risk labels: Words like "outdoor advertising" or "inner tubes" can seem risky to those who lend money.
  5. Ask experts: Talk to people who know about credit and funding. They can give advice on picking good names and codes.
  6. Check with trade groups: They know which codes work best for businesses like yours.
  7. Look at successful businesses: See what names and codes they use.
  8. Think about how it sounds: Choose a name that sounds safe and strong to banks.
  9. Keep it clear: Your name should make it easy to understand what you sell or do.
  10. Stay up-to-date with changes: Codes can change, so make sure yours is still good each year.

Understanding the real injury risks according to the CDC

After considering how to select safer business codes, it's important to know the true dangers in the workplace. The Centers for Disease Control (CDC) track injuries that happen on the job.

They show some businesses have more hurt workers than others because of things like falls or using dangerous machines.

Knowing these risks can tell you why some NAICS codes are seen as high-risk. If your business deals with a lot of injuries or uses lots of cash, you might face more problems getting money from banks or pay more for insurance.

It's smart to think about safety and cash when choosing your code.

Keeping Up-to-Date with NAICS Changes

NAICS codes undergo periodic revisions to reflect the changing economy and emerging industries, highlighting the need for businesses to stay abreast of these changes. Accurate classification using updated NAICS codes is critical for effective business analytics and may influence key operational decisions.

Staying informed on updates and changes to NAICS

Keeping up with NAICS updates ensures your business is classified correctly. Accurate coding is key for analytics and can affect funding approval.

  • Check the U.S. Census Bureau website regularly. They oversee NAICS and post changes.
  • Sign up for email alerts from business organizations. They share updates on codes.
  • Join industry groups linked to your field. Members often discuss classification changes.
  • Attend business webinars and workshops. These events can provide news on NAICS updates.
  • Review trade publications in your sector. Articles may highlight important coding shifts.
  • Talk with a tax professional or accountant. They keep track of changes that could affect you.
  • Update business documents as needed. This keeps your records correct if codes change.
  • Use the Small Business Administration (SBA) resources. The SBA gives guidance on NAICS codes.
  • Watch for changes like trademarks or licenses during renewal processes. They might point out new codes.

The importance of accurate NAICS coding for business analytics

Getting your NAICS code right is key for good business analytics. This code tells people what your company does. It helps you get important data about trends and markets that match what your business is all about.

Banks also look at this code when you ask for money or credit. They use it to see if your business fits the work they want to support.

Using the correct NAICS code makes sure others can find and understand your business better. This includes customers, suppliers, and even investors looking to put money into businesses like yours.

Making a mistake with your NAICS coding can mix up all this information, which might hurt your chances to grow or get funding. So, getting it right is super important!


You now know about NAICS codes and why they matter for businesses. Remember, the right code can help get financing and track how your company is doing. Have you checked if your business has the correct NAICS code? It could be a big help.

If your code shows you're in a high-risk industry, don't worry. There are ways to manage risks and still succeed. Use the tips from this article to guide you, and watch how well your business does!


1. What are NAICS codes?

NAICS codes are numbers that describe what kind of business you have. They help people understand the type of work you do.

2. Why should I watch out for NAICS codes in crowdfunding?

When you start a project with crowdfunding, knowing your NAICS code helps you tell others clearly about your business.

3. Can NAICS codes affect how my business deals with trademarks?

Yes, your NAICS code can show which group your trademark interests belong to and guide how you protect your brand.

4. Where do I find a list of these NAICS codes?

You can look at lists made by the government or online to find the right NAICS code for what your business does.




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