Glossary · Reading the business
Industry code(NAICS code)
In short
This is a standardized numerical code (like a NAICS code) that classifies a business's primary economic activity. You care because it determines if the business is eligible for an SBA loan and meets size standards.
What it means in a deal
Lenders use this code to cross-reference against the negative eligibility list and ensure the business meets the SBA's definition of a small business. Confirm the code accurately reflects the target business's main revenue-generating activities during due diligence.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Industry code
- How does an incorrect NAICS code on SBA Form 1919 impact 7(a) loan eligibility for a borrower?
- How does the SBA determine if a business is considered "small" for eligibility based on its NAICS code?
- How does the SBA handle a loan where the business assets are mostly intellectual property, such as software code?
- What are the consequences if the NAICS code entered into E-Tran differs from the primary business activity in the loan narrative?
- What is the specific impact if the NAICS code entered into E-Tran differs from the primary business activity described in the loan narrative?
- How is my prior management experience evaluated if it's in a different industry?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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