What is a restricted industry?
Businesses considered risky or undesirable by lenders and other companies. Other companies prohibit doing business with, and also do not want to lend to them. Work with a partner that values a relationship with you.
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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, because sometimes they don’t want to tell you. Our loan programs lend to all sectors.
What does restricted industry mean for a business loan?
A business that is in an industry the lender does not work with, or has much stricter rules for approval. They stay out of it because they see it as a higher risk for delinquency, defaults and losses. Other times they just don’t 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.
Are new companies restricted by lenders?
Many loan companies do not loan to new businesses. Check before applying if start ups have restrictions or are prohibited. Our programs work with 3 months and longer.
How to get a restricted industry business loan:
- Use the list provided to determine if your type may be considered restricted.
- Identify investors and any money source that will loan to your sector. Contact them and ask for their qualifying criteria. Select the best match based on your 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 – Types:
Accountants, Accounting firms, Accounts Receivables Factoring. Adult Entertainment, Escort Services, Gentleman's Club, and adult industries. National and Regional Airlines. Attorneys ATV Dealers, ATV Sellers and RV Dealers. Auto and Home Supply Stores. New Auto Dealerships and used car lots and dealerships. Auction Houses. Bitcoin. Bus Companies. Construction. Cemeteries and Funeral Homes. Consignment Stores, Child Day Care, and Churches. Collection Agencies, Check Cashing, and Bail Bonds. Credit Reporting, Protection and Restoration. Consulting. Collection Agencies, currency exchanges, and Wire Transfer. Dating and Escort Services. Debt Consolidation.
More restricted industry business loan type companies
Direct Mail. E-businesses and Commerce. Educational, Colleges and Schools. Factoring, 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. Freight Brokers. Gambling and Gaming Establishments. Gas Stations. Holding Companies, Insurance Agencies, and Investments. Home Building, construction, and housing related. Home based. Horoscope and Fortune Telling. Import and Export. Income tax return and preparation. Insurance Agents and insurance brokers. Internet and online Insurance Agencies, and Investment Opportunities. Lawyers. Lotteries and raffles
Further restricted industry business loan type companies
Kiosks. Lawyer and lawyers. Attorney and Attorneys. Legal practice and Legal Practices. Marinas. Mining and Quarrying. Magazine Subscriptions, Mail Order Coin Sales, Mobile Home Dealers, Mobile Phone Dealers, Wireless Stores and Cellular Stores. Mortgage Lenders and Mortgage Reduction. Motorcycle, Scooter, Motor Home and Camper Dealerships. Night Clubs. Non Profit and Grant Writers. Non Bank Cash Advance. Oil Pipelines and Gas fields. Online Stores, Online Retail Stores, Online Merchants, and Online sales. Payroll advance, Pawn Shops, Thrift Stores and Consignment Stores. Personal Trainers. Precious Metal Sales and Coin Sales. Printing and Printers. Real Estate Management, Investment, and Brokers. Recreational Vehicle Sales.
Restricted industry types continued
Schools. Sports Events Advice, Sports Instruction and Recreation Instruction. State Agencies and Government Agencies. Taxi and limousine service. Ticket Brokers, Time Share Investments and Tour Guides. Travel Agencies and discount clubs. Tobacco and Electronic Cigarettes, Firearms and Gun Stores. Trucking, Transportation, Logistics, and Sea Transportation. Used Car dealers, Auto Dealers, new car dealers and Truck Dealers. Used Furniture Stores and Furniture Retailers. Vehicle Inspection. Virtual Auction Houses. Vitamin Retailers. Wholesale Clothing. Wireless phone and accessories.
Elevated Scrutiny Industries
Other sectors are included in "elevated scrutiny". Home health care. Web development, Credit and debt counseling. Financial advisors and consultants. Elevated Scrutiny often includes: Annual Membership Clubs. Appraisal Services. Auction Houses. Benefit Packages. Boat Sales. Buyers Club and Coupon Books. Detective and Private Investigation. Donation. Door to Door Sales. Employment Agencies.
More elevated scrutiny industries:
Financial Aid Services. Flooring, Tile, Blinds and Windows. Formal wear. Fortune Tellers, Psychics, Astrologers and Spiritual advisors. Furniture Stores, 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 and seminars. Sports Memorabilia. Telemarketing, Ticket Agencies, Time Share. Web Design and Hosting. Utilities. Seasonal and challenged industries
Challenged industries are similar to those that get elevated scrutiny. Underwriting will consider them, but under a tougher approval process because of what they do.
Lenders often have total restrictions or high scrutiny for construction. They are either automatically declined or are offered lower amounts with shorter terms.
Insurance is hard to get 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.
What is a Seasonal Business?
Any company that has peak sales and operations during the same months every year. The rest 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, Catering Halls and Floral.
Moving and relocation.
Jewelry, Shipping, Golf Courses and Ski Resorts. Other seasonal operations 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. They are a small used car dealer in the Pueblo, NM area. Used Car sales are a restricted industry. We are able to assist them with our special industry programs. 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.
Getting a business loan in a restricted category
Businesses that have been denied for the type of operations they have must find a reliable partner. Ask lenders upfront if they work with your industry and will consider a loan.
Preferred Merchant List
They may be called favored industries.
If the lender has categories like this, they usually don’t want to tell you. Ask what type of lending they like to do. These questions will point you in the right direction and avoid unnecessary declines!