{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-if-a-business-is-eligible-if-it-earns-revenue-from-multiple-na","api_url":"https://dealroom.so/api/public/questions/how-does-a-lender-determine-if-a-business-is-eligible-if-it-earns-revenue-from-multiple-na","question":"How does a lender determine if a business is eligible if it earns revenue from multiple NAICS codes?","topic":"Eligibility determinations","audience":"lender","bot_mode":"lender","short_answer":"If a business earns revenue from multiple NAICS codes, the lender determines its primary industry based on the activity that generates the largest portion of its gross revenue. The size standard for this primary NAICS code is then applied.","rule":"For size eligibility, a business is categorized by its primary industry. This is identified by the NAICS code that accounts for the greatest percentage of the business's average annual receipts or employees over the past three years. The lender must gather financial data to support this determination and use the corresponding size standard to assess eligibility.","example":"A borrower runs a business that generates 60% of its revenue from software development (NAICS 541511, size standard $34M) and 40% from IT consulting (NAICS 541611, size standard $16.5M). The lender identifies software development as the primary industry and applies the $34M size standard. If the business's total revenue is $20M, it's eligible under this standard.","what_lenders_check":"Lenders must accurately identify the primary NAICS code and apply the correct size standard. Incorrect classification or failure to account for all revenue sources can lead to an incorrect size determination, jeopardizing loan eligibility and the SBA guaranty.","required_facts":["Primary industry","NAICS code","Gross revenue percentage","Average annual receipts","Size standard application"],"source_families":["13 CFR Part 121 - Small Business Size Regulations","SBA Table of Size Standards","SOP 50 10 - Lender and Development Company Loan Programs"],"official_sources":[{"title":"13 CFR Part 121 - Small Business Size Regulations","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-121"},{"title":"SBA Table of Size Standards","url":"https://www.sba.gov/document/support-table-size-standards"},{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"}],"related_questions":[{"question":"Can a trust or an estate be an eligible borrower for an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-trust-or-an-estate-be-an-eligible-borrower-for-an-sba-7-a-loan"},{"question":"What constitutes \"passive income\" disqualifying a business from 7(a) loan eligibility?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-passive-income-disqualifying-a-business-from-7-a-loan-eligibility"},{"question":"Are businesses that primarily derive revenue from real estate rentals eligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/are-businesses-that-primarily-derive-revenue-from-real-estate-rentals-eligible-for-a-7-a-l"},{"question":"Can a business primarily engaged in lending or investment be eligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-business-primarily-engaged-in-lending-or-investment-be-eligible-for-a-7-a-loan"},{"question":"What impact does a principal's recent federal tax lien have on 7(a) loan eligibility, even if paid?","url":"https://dealroom.so/for-lenders/questions/what-impact-does-a-principal-s-recent-federal-tax-lien-have-on-7-a-loan-eligibility-even-i"},{"question":"How does the SBA define 'passive business' making it ineligible for a 7(a) loan, and what specific activities might trigger this?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-define-passive-business-making-it-ineligible-for-a-7-a-loan-and-what-spec"}],"related_terms":[{"term":"Eligible business","url":"https://dealroom.so/glossary/eligible-business"},{"term":"Multiple","url":"https://dealroom.so/glossary/multiple"},{"term":"Eligible business purpose","url":"https://dealroom.so/glossary/eligible-business-purpose"},{"term":"Market multiple","url":"https://dealroom.so/glossary/market-multiple"},{"term":"Revenue","url":"https://dealroom.so/glossary/revenue"},{"term":"Eligible Small Business Concern","url":"https://dealroom.so/glossary/eligible-small-business-concern"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-if-a-business-is-eligible-if-it-earns-revenue-from-multiple-na","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}