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They are used to identify industry risk levels when applying for credit/loans.
They carry considerable amount of weight in a lender’s decision on whether to approve or not approve a business for credit/loans.
The NAICS code a business use, could get a business a denial or an approval for credit/loans from a lender.
A business can have multiple NAICS Codes for the industry that their business is in but should pick one to be the business primary code and only use this code when applying for credit/loans and on all other documents for the business like when opening up a bank account for your business.
Some codes can trigger an automatic denial, higher interest rates or/and lower credit limits.
Now, that you see how important NAICS codes are take the time to review the codes and pick the one that is best and less risky for the industry you are in.
Go to www.naics.com to review the NAICS codes.
The flip side to this is when your business is structured properly and have several other positive fundability factors the NAICS codes matter less. For example, a well set up business making $1 million in revenue every month should be able to get funding regardless what their NAICS code is.
Another article that will pique your interest is What is all the Talk About NAICS Codes.
PS: You can also go to www.exclusiveprocessingandconsulting.com to receive Free business credit tips periodically and a FREE consultation.
About the Author
Kimberly Lewis is currently the CEO of EPC Solutions LLC. She specializes in helping business owners establish excellent business credit scores and then leveraging those scores to access credit and cash for their businesses. For more information on business credit scores, business credit and business loans visit https://epc-solutions.net.