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Learn how to build business credit and access more business financing.

Low Risk Industries for Business Credit 

The main purpose of The North American Industry Classification System (NAICS) codes is to classify businesses in order to collect, analyze, and publish statistical data to streamline comparability.  

However, NAICS codes also provide a simple way for lenders to evaluate the risk level of potential borrowers and avoid high risk merchants.  

To increase your likelihood of obtaining financing, it’s critical to choose a low risk NAICS code. 

That’s what we’ll discuss here.  

What Are Some Low Risk NAICS Codes? 

It’s important to point out that the NAICS Association hasn’t published an official list of low risk codes.  

That said, business credit experts have identified low risk industries for business credit that have a higher level of “fundability.” 

Some of these include: 

541990 - All Other Professional, Scientific, and Technical Services 

541611 - Administrative Management and General Management Consulting Services 

541612 - Human Resources Consulting Services 

561320 - Temporary Help Services  

621610 - Home Healthcare Services 

445110 - Supermarkets and Other Grocery Retailers 

445131 - Convenience Retailers 

722515 - Snack and Nonalcoholic Beverage Bars 

624410 - Child Day Care Services 

541613 - Marketing Consulting Services 

561720 - Janitorial Services 

713940 - Fitness and Recreational Sports Centers 

812112 - Beauty Salons 

561499 - All Other Business Support Services 

812990 - All Other Personal Services 

813910 - Business Associations 

713940 - Fitness and Recreational Sports Centers 

611710 - Educational Support Services 

541611 - Administrative Management and General Management Consulting Services 

711510 - Independent Artists, Writers, and Performers 

All of these are generally considered low risk, which should make your business more attractive to lenders.  

By avoiding a high risk industry, this should make it easier to obtain a business credit card, a business line of credit, term loans, low rate payment processors, and business financing in general.  

It can also enable you to obtain other perks like lower credit card processing fees. 

However, you should always perform in-depth research and an analysis before making your final decision. 

What to Do if You Fit Multiple NAICS Code Descriptions 

In some cases, choosing a primary NAICS code will be straightforward for a small business.  

Other times, there may be situations where you fit multiple code descriptions, making it confusing as to which code to select.  

While the first two digits of a NAICS code focus merely on the business sector (something that’s easy to determine), things can get a bit murkier as you move to four digits.  

This indicates the industry group, and the full six digits, which indicate the specific market segment like in the examples listed above.  

The best way to ensure you choose the right primary NAICS code is to first consider the products or services you sell and the industries your company fits into.  

From there, narrow it down to a code that your business fits and that will get you the best business funding.  

Again, this boils down to knowing the low risk NAICS codes, which brings us to our next point.   

What Factors Make NAICS Codes Risky? 

Four main factors make a business high risk.  

One is being part of a heavily regulated industry with a lot of legislation.  

Those in the tobacco, electronic cigarette, alcohol, firearms, and gambling industries are prime examples.  

Because laws regulating these industries are subject to frequent changes, companies are considered high risk, which tends to make them less appealing to lenders.  

Next is being in an industry with frequent fluctuations in demand.  

Some retail companies, for instance, may experience a rise and fall in demand throughout the year where there may be a surge during the holidays and a substantial decrease in the new year.  

When demand declines, a business won’t bring in as much revenue, which lenders obviously aren’t keen on. Therefore, a business may be considered a high risk merchant account, making it more challenging to get funding like a small business loan. 

Third, is being in a hyper-competitive industry with high saturation.  

While healthy competition is usually fine, if you’re up against a high volume of competitors, this can make your business risky in the eyes of lenders.  

And fourth is being in an industry where innovation moves so fast that your company may become defunct in the near future.  

This is something that’s becoming more common with the rise of AI and other quickly advancing technology.  

What Types of Businesses Get the Most Funding? 

Numerous sources provide data on which businesses get the most funding — some of which have conflicting information.  

But to get a sense of who’s been getting the most funding recently, let’s look at two key resources.  

One is from the Winvale consulting firm, which ranked the top 10 industries by how much government funding they received in 2022.  

It is as follows: 

  1. IT  

  1. Professional services 

  1. Industrial products and services 

  1. Transportation and logistics services 

  1. Facilities and construction  

  1. Human capital  

  1. Office management 

  1. Travel and lodging 

  1. Security and protection  

  1. Clothing, textiles, and subsistence  

Note that this data specifically features government funding, but it gives us a pretty good idea of which industries give business owners the best chance of obtaining financing.  

Also, investment data platform, KingscrowFd, performed research to identify industries with the highest funding growth in recent years.  

According to their findings, the top five industries with the most growth are: 

  1. Beauty and personal care 
  2. Marketing and advertising 
  3. Financial and insurance products and services 
  4. Media, entertainment, and publishing 
  5. Energy, power, and natural resources  

Why NAICS Codes Matter for Business Financing 

Again, the primary purpose of NAICS codes is to provide an effective means of classifying businesses for objective comparison.  

But beyond that, they play an integral role in allowing lenders to assess a company’s risk level.   

Whether it’s an SBA loan, trade credit, or any other type of business financing, a lender can simply look at a company’s NAICS code for a baseline reading of their risk level.  

A NAICS code doesn’t necessarily tell the whole story, but it allows a lender to quickly gauge whether a company is low risk, high risk, or somewhere in between.  

For example, a company that sells tobacco or alcohol would be considered a high risk business because of the inherent level of legislation that comes along with it.  

The bottom line is that the industry you’re in heavily impacts your risk level and, in turn, your fundability.  

And NAICS codes play a big role in how lenders determine that.  

If you have a NAICS code that corresponds with a low risk industry, it should be easier to get funding to increase your working capital and cash flow.  

You should encounter less friction when opening a merchant account. And you may be able to get better payment processing terms with a credit card and lower transaction fees. 

Further, you may be able to get better terms with a payment processor or payment gateway.  

But if you have a NAICS code that corresponds with a high risk industry, the opposite is true, and it will likely be more difficult to get funding, open a merchant account, and get favorable payment processing terms.  

Besides that, a lender may demand a higher down payment and interest rate if you’re approved because of the greater credit risk you present.  

For instance, the primary NAICS code is one of the key factors Fora Financial, The Small Business Administration, and many online lenders consider when determining eligibility.  

Can You Have More Than One Primary NAICS Code? 

No, you can only have one primary NAICS code.  

That’s why it’s important to choose the one that gives you the most fundability to open the door for a business loan, merchant cash advance, tradeline, and other forms of business funding. 

Note, however, that you can have multiple NAICS codes if you sell multiple goods and services.  

As explains, “While every company has only one ‘primary’ NAICS code, there is no limit to how many ‘secondary’ NAICS codes and product or service descriptions a company may choose to identify itself with.” 

So if you’re operating in more than one industry, you’ll likely have a primary NAICS code along with one or more secondary codes. 

The key to opening the door for business credit is to choose a low risk industry for your primary NAICS code.  

Can You Change Your NAICS Code? 

The short answer is no.  

According to The NAICS Association, “There is no ‘official’ way to have a company’s NAICS code changed. Various Federal government agencies maintain their own lists of business establishments, and assign classification codes based on their own programmatic needs.” 

If you find yourself in a situation where you need to change your code, they suggest contacting the agency that assigned you the code.  

They should be able to advise you on the steps you need to take to obtain a new number.  

How to Build Your Business Credit 

Like personal credit, building business credit is a process that takes time. But you can jumpstart it by following four key steps.  

First, take care of the fundamentals like getting an EIN, opening a business bank account, and applying for a DUNS number.   

Next, get a business credit card, ideally with favorable terms and a reasonable interest rate.  

You may be somewhat limited with your options initially, especially if you’re a small business owner just starting out or have bad credit.  

But as long as you make your payments on time or early, you may be able to negotiate better terms with your bank or credit union and potentially secure a higher credit limit.  

Or at the very least, this can help you establish a good credit history and open the door for a new lender later on while avoiding getting stuck with bad credit business loans.  

Third, look to secure business tradelines with vendors or suppliers that report to at least one major credit bureau.  

Those with net 30 payment terms tend to be best because your payment history should appear quicker than if it’s a longer payment term like 60 or 90 days.  

This kills two birds with one stone because it 1) gives you access to working capital with some repayment wiggle room and 2) helps you quickly establish a good business credit score.  

Finally, you can boost your credit report by using a tool like eCredable Business Lift, which reports business utility and telecom payments like electricity, internet, water, gas, and TV.  

This offers a simple way to quickly increase your credit score and build your business credit report by paying the bills like you’d be doing anyway.  

You can learn more about eCredable Business Lift here.  


The primary NAICS code you choose heavily impacts your fundability.  

By selecting the right code from the start, it should be easier to secure the business financing necessary to fuel growth for your small business.  

That’s why you’ll want to give it careful consideration and choose the optimal code.  

Learn More About Building Business Credit:

How Long Does it Take to Build Business Credit?
How To Build Business Credit Without Using Personal Credit 
Can You Buy a House with Business Credit? 
How to Build Business Credit With Bad Personal Credit 

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