Glossary · Reading the business
North American Industry Classification System code(NAICS code)
In short
A standardized code used by federal agencies to classify business establishments by industry. This code determines if the business you're buying meets SBA size standards and eligibility rules.
What it means in a deal
Every business has a NAICS code, which the SBA uses to check eligibility for a 7(a) loan, specifically against size standards and ineligible business types. Your lender will verify the business's NAICS code early in the process. Ensure the primary business activity aligns with an eligible code.
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 North American Industry Classification System 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 specific requirements apply to a franchise system for SBA 7(a) loan eligibility?
- How does the SBA evaluate an emerging franchise system for 7(a) loan eligibility?
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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