{"ok":true,"canonical_url":"https://dealroom.so/glossary/industry-risk","api_url":"https://dealroom.so/api/public/glossary/industry-risk","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"industry-risk","term":"Industry Risk","group":"Reading the business","definition":"This refers to the inherent risks associated with the specific industry in which the target business operates, such as economic downturns, technological disruption, or regulatory changes. It directly impacts the business's stability and future cash flow.","what_it_means":"Lenders carefully assess Industry Risk during underwriting, looking at factors like industry trends, competition, and barriers to entry. You need to do the same. A high-risk industry might require a stronger financial position or more collateral from you, or even make the business ineligible for an SBA loan.","url":"https://dealroom.so/glossary/industry-risk","official_sources":[],"related":[{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"business-plan","term":"Business plan","url":"https://dealroom.so/glossary/business-plan"},{"slug":"market-analysis","term":"Market analysis","url":"https://dealroom.so/glossary/market-analysis"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"}],"related_questions":[{"question":"How is my prior management experience evaluated if it's in a different industry?","url":"https://dealroom.so/sba-7a/questions/how-is-my-prior-management-experience-evaluated-if-it-s-in-a-different-industry"},{"question":"Does my business's industry affect its eligibility for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/does-my-business-s-industry-affect-its-eligibility-for-an-sba-7-a-loan"},{"question":"Is prior experience in my specific industry required for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/is-prior-experience-in-my-specific-industry-required-for-an-sba-7-a-loan"},{"question":"Will acquiring a business in a restricted industry (e.g., gambling, passive investing) kill approval?","url":"https://dealroom.so/sba-7a/questions/will-acquiring-a-business-in-a-restricted-industry-e-g-gambling-passive-investing-kill-app"},{"question":"Does my business's industry type affect its eligibility for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/does-my-business-s-industry-type-affect-its-eligibility-for-an-sba-7-a-loan"},{"question":"How does my business's industry affect its eligibility for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/how-does-my-business-s-industry-affect-its-eligibility-for-an-sba-7-a-loan"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Industry Risk","url":"https://dealroom.so/glossary/industry-risk","source_type":"DealRoom Data"}}