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    2 Replies Latest reply on Mar 19, 2008 4:05 AM by LUCKIEST

    Business Loans: Restricted and High Risk Industries

    bankpig Adventurer

      Ever wonder why your business loan application is always declined even though you have a great business and an outstanding FICO score? Banks may view your business as a "restricted" or "high risk" industry. Many local bankers are unaware of non-target industries and those who are familiar with such minutia, may not be upfront with you because they are confused with fair lending laws which prohibit bankers from discouraging applicants to apply for a loan.


      Resticted industries (automatic decline) include:

      • Ammunition or Weapons Manufacturing; wholesale and retail
      • Bail Bonds
      • Check Cashing Agencies
      • Energy, oil trading, or petroleum extraction or production
      • Federal Reserve Banks, foreign banks, banks, bank holding companies, loan brokers, commodity brokers, security brokers, mortgage brokers, mortgage bankers, mortgage companies, bail bond companies, or mutual fund managers
      • Gaming or Gambling Activities
      • Loans for the speculative purchases of securities or goods
      • Pawn shops
      • Political campaigns, candidates, or committees
      • Public administration (e.g., city, county, state, and federal governmental agencies)
      • X-rated products or entertainment

      High Risk Industries (subject to stricter underwriting guidelines):

      • Agriculture or forest products
      • Auto, recreational vehicle or boat sales
      • Courier services
      • Computer and software related services
      • Dry cleaners
      • Entertainment (adult entertainment is to be considered restricted)
      • Gasoline stations or convenience stores (also known as c-stores)
      • General contractors
      • Healthcare; specifically nursing homes, assisted living facilities, and continuing care retirement centers
      • Special trade contractors
      • Hotels or motels
      • Jewelry, precious stones and metals; wholesale and retail
      • Limousine services
      • Long distance or "over-the-road" trucking
      • Mobile or manufactured home sales
      • Phone sales and direct selling establishments
      • Real estate agents/brokers
      • Real estate developers or land sub-dividers
      • Restaurants or drinking establishments
      • Software or programming companies
      • Taxi cabs (including the purchase of cab medallions)
      • Travel agencies