The North American Industry Classification System (NAICS) are 6-digit codes that classify businesses by the type of activity they are engaged in to facilitate the administration of the Internal Revenue Code.
You will need this code to apply for a Paycheck Protection Program (PPP) loan with any lender. Eligible PPP loans can be forgivable if spent on approved business expenses.
For gig workers, independent contractors and sole proprietors, this code describes your primary business activity that you will enter on your Schedule C on your tax return. Read on to learn more information about this important classification.
You can find the NAICS code that most closely matches your business on the NAICS website.
Here are codes to investigate when determining your classification:
Most tax filing software will allow you to look up your code within the software, but you can find a full list on the IRS instructions for the Schedule C here.
NAICS codes are used for many purposes, but one of the most important is that the Small Business Administration (SBA) uses them to set size standards for particular businesses to be considered “small” in order to qualify for various small business-related programs.
Here’s why you need to know your NAICS code:
To make sure your business meets a lender’s industry code requirement, you’ll want to check with them regarding any ineligible industries before submitting your application. A small mistake could cause a delay or rejection so double check your numbers before you press “upload”. You can find a list of industry codes deemed risky by NAICS here.
Apply today before the funding runs out or the May 31st deadline is reached: Apply for a PPP Loan Now.
SmartBiz has helped tens of thousands of American small businesses apply for the funding they need during the pandemic crisis. We know this new round of the PPP can be a lifesaver for hard-working entrepreneurs. Our streamlined, online application helps you easily apply.
Learn more about the PPP on the SmartBiz Loans website. Note: As of the first week in March 2021, very small businesses (including gig workers) can enter their gross income to calculate the loan amount to apply for. Previously based on net income, this new calculation can provide applicants the opportunity to apply for more funding. Read our easy-to-understand article here for all the information you need to apply:
Most small businesses can qualify for the Payment Protection Program. This includes:
Another stipulation to be eligible for a PPP loan is that your business was operational as of February 15, 2020. If you started your business after that date, you will not be eligible for this program.
The availability of PPP loans remains subject to SBA guidance and other factors, including the amount of funding available to banks and the quantity of eligible applicants considered on a first-come, first-served basis.
The information provided above is for educational purposes only. Please consult the SBA website for actual rules and the most current guidance.The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult a certified accountant or tax professional for further information.