ASSETPROFILE GROUP, LLC

How does the SIC or NAIC codes effect whether your business is characterized as High Risk, Moderate Risk or Low Risk?

NAIC CODE/SIC CODE CAN GET YOU FLAGGED AS HIGH RISK

NAIC/SIC CODE AND THE HIGH RISK CLASSIFICATION

Your business may get red flagged by D&B solely based on the industry of your business. Imagine that!


A likely way to red flag your business is to select an SIC code/NAIC code that is considered an high risk industry. SIC stands for Standard Industrial Classification. The other is called NAIC; North American Industrial Classification.


Important issue here! D&B uses the outdated SIC code because the government uses SIC. It was outdated in 1997 because many industries were created, that didn’t fall under the SIC. NAIC was a better fit. D&B uses SIC because they report and sell data to the IRS and the federal government. In other words, if your tax return information doesn’t match up to what D&B collected about your business, the business may be audited.

naic and sic codes effects

What are traditionally "low risk" industries?

What industries are considered moderate risk?

What industries and NAIC codes are red flagged as high risk?

Source

https://www.naics.com/ naicswp2014/wp-content/ uploads/2014/10/NAICS- ASSOCIATION-High- Risk-and-Cash- Intensive-NAICS-Codes- List.pdf

Why

Many of the above high risk businesses accept cash. And cash businesses are considered High Risk. Can you believe that? Why would a cash business be considered high risk? Because their revenue cannot be confirmed by D&B. So, D&B calls them high risk. They may have other arbitrary reasons.

D&B's Recommendation

D&B's recommendation of Low Risk, Moderate Risk or High Risk cannot be created when they don't have enough information match your business to the "limit matrix" such as "no industry classification." Source: https://creditreports. dnb.com/ wcsstore/C onsumerDirect /HelpFiles/ebir/ credit_line.htm