Banks and similar lenders prefer lending to certain industries, such as Medical, professional and manufacturing. Does that mean that certain industries are at a disadvantage when applying for a business loan? Yes. Apply for programs that will approve loans in industries other lenders will deny.
In short, yes. Service industries, industries that are heavy in service and hospitality do not have some of the advantages that other industries such as Medical and manufacturing have. Service and hospitality industries generally do not have hard collateral which manufacturing and Medical have much more. Both medical and manufacturing both have valuable equipment which can be taken as collateral in a loan request.
Another advantage that the Medical, professional and manufacturing sectors have is that on the average, they stay in business longer than service and hospitality industries. Service industries such as Restaurants have a higher frequency of going out of business.
The past due rate for industries such as Medical is far lower than average in the loan portfolio. One of the reasons lenders like Medical practices is that their past due ratio and default ratio is among the lowest of any industry. It is also known in the lending industry that Restaurants go out of business more often than the average business. This results in a double negative for lenders. If a certain business sector goes out of business more frequently and they do not have collateral, then the lenders will lose more often lending to these sectors, and they will lose more money at the time. In summary, the lenders lose more money more often.
While Restaurant and certain hospitality organizations do have some collateral, Restaurant equipment and hospitality equipment such as beds and furnishings will bring in far less than production equipment and used medical equipment.
Lenders will not discuss these issues, however most traditional lenders do not favor certain service industries such as Restaurant, as well as hospitality industries.