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Restricted industry
Also called prohibited industry, ineligible industry, restricted list, declined SIC, restricted industries.
Business types a funder will not fund at all, maintained as an internal list keyed to industry codes and driven by regulation, bank partner requirements, reputational policy or loss history.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
Four different forces produce these lists and they behave differently.
- Legal and regulatory. Businesses touching federally illegal activity, or requiring licences the funder cannot verify. Cannabis is the standing example: legal in many states, federally controlled, and therefore off-limits to most funders whose banking partners will not touch the proceeds.
- Bank and facility restrictions. A non-bank funder borrowing on a warehouse line inherits the lender's excluded-industry schedule. Those exclusions are contractual and cannot be waived by the funder at any price.
- Loss experience. Industries where the funder's book performed badly: long-cycle construction, some trucking segments, certain professional practices, seasonal operations with concentrated revenue.
- Reputational policy. Adult businesses, gambling, firearms in some programs, debt relief, collections agencies, and money service businesses.
The SBA maintains its own published list of ineligible business types for its programs, which is broader in some places and narrower in others than a private funder's list.
Lists are usually implemented against NAICS or SIC codes, which means screening is automated and blunt.
Where this one catches people
When a funder says it cannot fund an industry, the constraint is often upstream in its own credit facility rather than in its appetite - which is why the answer does not change when you offer a higher rate or more collateral. The productive question is not whether they will make an exception but whether the restriction is theirs or their lender's.
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Restricted industry — common questions
What does restricted industry mean?
Business types a funder will not fund at all, maintained as an internal list keyed to industry codes and driven by regulation, bank partner requirements, reputational policy or loss history.
Where does restricted industry catch people out?
When a funder says it cannot fund an industry, the constraint is often upstream in its own credit facility rather than in its appetite - which is why the answer does not change when you offer a higher rate or more collateral. The productive question is not whether they will make an exception but whether the restriction is theirs or their lender's.
Is restricted industry the same as an interest rate?
Restricted industry is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does restricted industry apply to?
It is not specific to one product — it appears across the market.
Is there a worked example of restricted industry?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside restricted industry?
NAICS code, Non-bank lender, OFAC screening, Portfolio, Qualification criteria.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.