What Are NAICS Codes?

NAICS (North American Industry Classification System) codes are six-digit numbers that classify businesses by their primary economic activity. The U.S. Census Bureau maintains the system, which is used by government agencies, lenders, and researchers to categorize and analyze business data.

How NAICS Codes Are Structured

NAICS codes follow a hierarchical structure. The first two digits identify the broad economic sector, and each additional digit narrows the classification:

• Sector (2 digits): Broad category like Construction (23) or Retail Trade (44-45)
• Subsector (3 digits): More specific, like Food Services (722)
• Industry Group (4 digits): Narrower focus, like Restaurants (7225)
• Industry (5 digits): Specific industry, like Full-Service Restaurants (72251)
• National Industry (6 digits): Most specific level, like Full-Service Restaurants (722511)

Why NAICS Codes Matter for Loans

NAICS codes affect your financing in several ways:

• SBA eligibility: The SBA uses NAICS codes to determine if your business qualifies as "small" based on revenue or employee thresholds specific to your industry
• Industry risk assessment: Lenders use NAICS codes to evaluate industry-specific risk factors
• Loan program eligibility: Some lending programs target specific industries identified by NAICS code
• Benchmarking: Lenders compare your financials to industry averages based on NAICS classification

SBA Size Standards by NAICS Code

The SBA defines "small business" differently for each industry. Manufacturing businesses may qualify with up to 500-1,500 employees, while retail businesses typically must have under $8-41.5 million in annual revenue.

Your NAICS code determines which size standard applies to your business. You must meet the size standard for your primary NAICS code to qualify for SBA loans.

Finding Your NAICS Code

You can find your NAICS code through several methods:

• Search the Census Bureau's official NAICS database at census.gov/naics
• Check your business tax returns — your accountant may have assigned one
• Review your business license or registration documents
• Use the SBA's size standards tool which includes NAICS lookup

Choosing the Right Code

If your business spans multiple activities, use the NAICS code for your primary revenue-generating activity. For example, a business that manufactures and retails furniture would use the manufacturing code if most revenue comes from manufacturing.