NAICS Codes: How They Affect Your Loan Eligibility and Business Credit

Most small business owners don't think much about their NAICS code. They entered it when they registered their business, promptly forgot about it, and haven't considered it since. But lenders, credit bureaus, and the SBA all use your NAICS code to classify your business — and that classification affects your interest rates, approval odds, maximum loan amounts, and SBA size standard eligibility. Your NAICS code is a key part of your fundability checklist. If your code is wrong — and it often is — you may be unknowingly classified in the wrong risk tier, directly impacting your business credit scores. Here's what you need to know.

What Is a NAICS Code?

NAICS stands for North American Industry Classification System. It's a 6-digit code used by the U.S. Census Bureau, the IRS, the SBA, and most financial institutions to classify businesses by their primary economic activity. The system covers 20 industry sectors from agriculture to utilities to professional services.

The code structure works hierarchically:

• Digits 1–2: Sector (e.g., 72 = Accommodation and Food Services)
• Digit 3: Subsector (e.g., 722 = Food Services and Drinking Places)
• Digits 1–4: Industry group (e.g., 7225 = Restaurants and Other Eating Places)
• Digits 1–5: NAICS industry (e.g., 72251 = Full-Service Restaurants)
• All 6 digits: National industry (e.g., 722511 = Full-Service Restaurants)

Why NAICS Codes Matter for Funding

Your NAICS code affects your funding in four distinct ways:

NAICS Codes Lenders Often Restrict

Every lender maintains its own restricted list, but these categories appear most frequently across multiple lender policies:

How to Find Your NAICS Code

Your NAICS code appears on several documents you likely already have:

• IRS correspondence: Your EIN confirmation letter (CP 575) often includes your NAICS code based on how you described your business.
• Business tax returns: Schedule C (sole proprietors) or Form 1120/1065 shows your NAICS code at the top of the form.
• Secretary of State filing: Some state formation documents include industry classification codes.
• D&B profile: Your Dun & Bradstreet business file shows the NAICS code associated with your business.

To look up the official NAICS code for your type of business, visit the U.S. Census Bureau NAICS search tool at census.gov/naics. Enter keywords describing your primary business activity and it will return the most relevant codes.

What to Do If Your Code Is Wrong

Wrong NAICS codes are more common than most business owners realize — and they can cause problems:

• An IT consulting firm classified under "Computer Systems Design" (NAICS 54151) vs. "Custom Computer Programming Services" (NAICS 541511) will have different SBA size standards.
• A staffing agency for healthcare workers vs. a general staffing firm operate in different NAICS categories with different risk profiles.
• A marketing agency classified as "Advertising Agencies" (NAICS 541810) vs. "Marketing Consulting Services" (NAICS 541613) has different lender risk scores.

NAICS Codes and SBA Size Standards

For SBA loan eligibility, your business must qualify as a "small business" under the SBA's size standards — which are defined by your NAICS code. Size standards come in two formats:

• Revenue-based: Most service industries are measured by average annual revenue over 3 years. Limits range from $2.5M to $47M depending on NAICS code.
• Employee-based: Manufacturing and mining industries are measured by number of employees. Limits range from 100 to 1,500 employees.

A business that exceeds the size standard for its NAICS code is not eligible for SBA loans — even if it's small by general standards. This is why the right NAICS code matters for larger businesses approaching those thresholds.

Businesses with Multiple Activities

If your business conducts multiple types of activities, you should use the NAICS code that reflects your primary revenue-generating activity. Secondary activities can be listed with D&B and in your business profile, but the primary code is what lenders and the SBA use for classification purposes.

Example: A contractor who does 70% residential remodeling and 30% HVAC installation should use NAICS 236118 (New Housing Operational Builders, NOC) or 238220 (Plumbing, Heating, and Air-Conditioning Contractors), depending on which accurately reflects primary revenue.

Rachel Torres

Senior Financial Writer

Rachel specializes in industry-specific funding guides and commercial lending strategy. Her work covers the unique capital needs of food service, healthcare, construction, and other sectors where standard loan advice falls short.