What is a restricted industry?
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FAQ Frequently asked questions on restricted industry business loans
How do I know if my business is considered restricted by lenders or not?
Ask the lender before applying if they have programs available for your industry. Sometimes they do not want to say they won’t loan to your industry. Our loan programs lend to all industries.
What does restricted industry mean for a business loan?
A business is in an industry the lender does not lend to or has much stricter rules for approval. They don’t lend to it because they see it as a higher risk for delinquency, defaults and losses. Other times the lender does not have expertise in that field.
What do challenged and prohibited industries mean?
These are industries lenders will scrutinize more and require a longer time in business, higher credit scores and revenues. Used car lots, construction and trucking are examples. Ask the lender if they have any limitations on lending to your business type.
Is my new business considered restricted by loan companies?
Many loan companies do not loan to new businesses. Check with the loan company before applying if new businesses have restrictions or are prohibited. Our programs loan to businesses 3 months and longer.
How to get a restricted industry business loan:
- Use the list provided to determine if your business type may be considered a restricted industry.
- Identify lenders that will lend to your industry. Contact those lenders and ask for their qualifying criteria. Select the best match based on your company’s needs and their approval criteria.
- If approved, request and review closing stipulations and documents. Submit all required closing documentation. Complete merchant call if required.
- Receive funds into your business checking account.
Restricted industries or elevated scrutiny businesses – examples:
Many industries are restricted by lenders. For example, restricted industries include:
Accountants, Accounting firms, Accounts Receivables Factoring Companies.
Adult Entertainment, Escort Services, Gentleman’s Club, and adult industries.
Airport companies and Airport related companies, Airlines, and Regional Airline Companies.
ATV Dealers, ATV Sellers and RV Dealers.
Auto and Home Supply Stores.
New Auto Dealerships and used car lots and dealerships.
Cemeteries and Funeral Homes.
Consignment Stores, Child Day Care Services and Churches.
Collection Agencies, Check Cashing Companies, Bail Bond companies, Credit Reporting Services, Credit Protection Services Businesses, Credit Card Protection and Credit Restoration / Repair Businesses and Consulting Businesses.
Collection Agencies, currency exchanges, and Wire Transfer Businesses.
Dating Services and Escort Services.
Debt Consolidation Companies
More restricted industry business loan type companies
Direct Mail Companies.
E-businesses and E-Commerce businesses.
Educational Services, Colleges and Schools.
Factoring Companies, Financial Institutions, Financial Transactions Firearms sales, weapon sales
Financial services and lending
Financial Transaction Processing, Financial Advisors and Freight Forwarding Forwarders.
Fitness and Recreational Facilities.
Fraternities and Sororities.
Gambling and Gaming Establishments.
Holding Companies, Insurance Agencies, and Investments.
Home Building, Home Construction, Housing Related Industries, and Home Home based business, other home based businesses.
Horoscope and Fortune Telling.
Import and Export Companies.
Income Tax Preparatory Services, and Income Tax Return Services.
Insurance Agents and insurance brokers.
Insurance companies, Insurance Agencies, and Investment Opportunities.
Lotteries, Raffles, Gaming and Gambling.
Further restricted industry business loan type companies
Lawyer and lawyers. Attorney and Attorneys. Legal practice and Legal Practices.
Mining Companies and Quarrying.
Magazine Subscriptions, Mail Order Coin Sales, Mobile Home Dealers, Mobile Phone Dealers, Wireless Stores and Cellular Stores,
Mortgage Lenders and Mortgage Reduction Services.
Motorcycle and Scooter Dealerships and Motor Home and Camper Dealerships.
Non Profit Companies, Not for Profit Companies and Not for Profit Grant Writers.
Non Bank Cash Advance Companies.
Oil Pipelines companies and Oil and Gas field companies
Online Stores, Online Retail Stores, Online Merchants, and Online sales.
Payroll Companies, Pawn Shops, Thrift Stores and Consignment Stores.
Personal Trainers. Precious Metal Sales and Coin Sales.
Printing and Printers.
Real Estate companies, Real Estate Management Companies, Real Estate Investments, and Real Estate Brokers.
Recreational Vehicle Sales
Restricted industry types continued
Sports Events Advice, Sports Instruction and Recreation Instruction.
State Agencies and Government Agencies.
Taxi services and Tax Preparation Services
Ticket Brokers, Time Share Investments and Tour Guides.
Travel Agencies, Discount Travel Clubs, Travel Related Companies and Travel Subscriptions.
Tobacco and Electronic Cigarettes, Firearms and Gun Stores.
Trucking Companies, Transportation companies, Logistics Companies and Sea Transportation companies.
Used Car dealers, Auto Dealers, new car dealers and Truck Dealers.
Used Furniture Stores and Furniture Retailers.
Vehicle Inspection Companies.
Virtual Auction Houses.
Wireless phone and accessories.
Elevated Scrutiny Industries
Other Industries are reviewed with “elevated scrutiny”.
Home health care companies. Private home care companies.
Web development, Credit and debt counseling. Financial advisors and consultants.
Elevated Scrutiny industries often include:
Annual Membership Clubs and Appraisal Services.
Auction Houses and Auction Businesses.
Benefit Package Companies.
Boat Sales, Business Opportunity Companies.
Buyers Club and Coupon Book Companies .
Detective services and Private Investigator Services or companies.
Diet companies or Diet program companies.
Donation Companies. Door to Door Sales companies.
More elevated scrutiny industries
Financial Aid Services Companies.
Flooring companies, Tile Companies, Blinds Companies, Window Companies.
Formal wear companies.
Fortune Teller Companies, Psychics, Astrologers and Spiritual advisors.
Furniture Stores, Home Based Businesses, Homeopathic Remedies and drugs insurance.
Modeling Agencies and Beauty Pageant Organizations.
– Mortgage Lender or Mortgage lenders
Multilevel Marketing and Pyramid Sales.
Online Electronic, High Ticket Electronics, Prepaid Phone Card Companies, Prepaid Phone Card Seminar Companies, Sports Memorabilia Companies, Telemarketing Companies, Ticket Agencies, Time Share Companies and Web Design and Web Hosting Companies.
– Construction companies are Restricted Industry or Elevated Scrutiny.
– Trucking companies
– Utility companies
– Seasonal business Challenged Industries
Challenged industries are similar elevated scrutiny industries. Underwriting will consider them, but under a tougher review and approval process because of the industry they are in.
Lenders often either have restrictions or elevated scrutiny of companies
that work in construction type work. These companies are either declined
or lower amounts with shorter terms are approved.
Insurance companies are hard to get business funding for.
Travel agencies and convenience stores that sell gasoline often have to payout most of the commissions they get. As a result, most of the revenue they show coming into their account is not business revenue. Only a small part of it is. Another example is a travel agency which may keep a small percentage of what they receive and payout the rest. Insurance companies also receive commissions for life insurance the sold but then the have to pay the insurance broker that sold that policy.
Lenders have to make a decision and approval amount based on their real income, or net income.
These businesses have difficulty getting funding:
What is a Seasonal Business? Definition of a Seasonal Business:
A Seasonal Business is a Business that has it’s Peak Sales and Operations during part of the year. The remainder of the Year they are either slow or closed.
They are especially scrutinized by lenders who will ask for more documentation such as additional years tax returns and payback months bank statements from previous years.
Examples of Seasonal Businesses include:
Accountants and Tax Preparation Services.
Bridal Wear businesses, Catering Halls, Floral Businesses,
Moving Companies, Taxi and Limousine Services, Jewelry, Shipping Businesses, Golf Courses and Ski Resorts. Other seasonal businesses are nurseries, ice cream shops and amusement parks.
Example: Customer Case
Santa Fe, NM. Pueblorides, a used car dealer in the Santa Fe area completed a $45,000 working capital line. The company is a small used car dealer in the Pueblo, NM area. Used Car sales are a restricted industry. We were able to assist them using a small number of business lines available to fund this industry. They were turned down by several banks and other lenders. With this funding, they were able to increase the number of vehicles on their lot.
Callers tell us they have been denied for restricted industry or in a restricted industry.
Getting a business loan in a restricted industry
Businesses that have been denied by a lender for being in a restricted industry will have to get a business loan another way. Ask lenders upfront if they will loan to businesses in your industry. Find out if they put businesses into other funding categories. If so, what are they? These categories sometimes include the following:
Preferred Merchant List
They may be called favored industries.
If the lender has these categories, they will not tell you. Ask if they have preferred industries. Ask if they have restricted industries they do not lend to. Finally ask if they have industries they label as hard to lend to. Asking these questions will help you get a restricted industry business loan. They may avoid unnecessary declines.
Thank you for visiting our restricted industry business loan resource page.