{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-an-incorrect-naics-code-on-sba-form-1919-impact-7-a-loan-eligibility-for-a-borrow","api_url":"https://dealroom.so/api/public/questions/how-does-an-incorrect-naics-code-on-sba-form-1919-impact-7-a-loan-eligibility-for-a-borrow","question":"How does an incorrect NAICS code on SBA Form 1919 impact 7(a) loan eligibility for a borrower?","topic":"Eligibility determinations","audience":"lender","bot_mode":"lender","short_answer":"An incorrect NAICS code can significantly impact eligibility if it misrepresents the business's primary activity, potentially leading to a denial of the loan or guaranty repair.","rule":"The NAICS code determines the applicable size standard and often indicates if the business is an ineligible type. Lenders must ensure the code accurately reflects the business's primary revenue-generating activity, as misclassification can result in a business being deemed ineligible under SBA size or activity rules.","example":"A lender submits a loan application for a 'consulting firm' using NAICS 541611 (Management Consulting), which meets the size standard. If, upon further review, the firm is actually a 'real estate brokerage' (NAICS 531210), it may exceed the size standard or fall under different eligibility rules, potentially invalidating the loan.","what_lenders_check":"Lenders must verify the NAICS code against the business's actual operations and financial statements. Discrepancies raise flags about the borrower's eligibility and the lender's due diligence, risking SBA guaranty purchase.","required_facts":["Incorrect NAICS code","Primary business activity","Size standard","Eligibility rules","Guaranty validity"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 121 - Small Business Size Regulations","SBA Form 1919 - Borrower Information Form","SBA Table of Size Standards"],"official_sources":[{"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"},{"title":"13 CFR Part 121 - Small Business Size Regulations","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-121"},{"title":"SBA Form 1919 - Borrower Information Form","url":"https://www.sba.gov/sites/default/files/2025-03/2025.02.27%20Form%201919%20-%20Updates%20%28FINAL%29_03-12-2025%20%281%29.pdf"},{"title":"SBA Table of Size Standards","url":"https://www.sba.gov/document/support-table-size-standards"}],"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":"NAICS code","url":"https://dealroom.so/glossary/naics-code"},{"term":"Form 1919","url":"https://dealroom.so/glossary/form-1919"},{"term":"Aggregate SBA 7(a) Loan Eligibility","url":"https://dealroom.so/glossary/aggregate-sba-7-a-loan-eligibility"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"SBA Form 1919 Disclosure","url":"https://dealroom.so/glossary/sba-form-1919-disclosure"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"}],"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-an-incorrect-naics-code-on-sba-form-1919-impact-7-a-loan-eligibility-for-a-borrow","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."]}