FINANCE RESTRICTED INDUSTRIES – normally you wouldn’t think this matters when requesting financing. Certain industries have restrictions when it comes to borrowing money, securing lending from banks, or obtaining new jobs and contracts with the federal government or general contractors who work with the Systems For Awards Management (SAM)

Instead of being a finance company, have the word consultant in your name for example. Think about what you are selling and make the name marketable and generic when it comes to difficult industries to finance. 

Restricted Industries list pertains mainly when obtaining financing

 Restricted industries (automatic decline) include:

• Ammunition or Weapons Manufacturing; wholesale and retail
• Bail Bonds
• Check Cashing Agencies
• Energy, oil trading, or petroleum extraction or production
• Finance: (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)
• General contractors
• Gasoline stations or convenience stores (also known as c-stores)
• 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 subdividers
• Restaurants or drinking establishments
• Software or programming companies
• Taxi cabs (including the purchase of cab medallions) Travel agencies

When it comes to securing financing in the business world, navigating the landscape of restricted and high-risk industries becomes a crucial task for entrepreneurs and business owners. The delineation between industries deemed acceptable for financing and those that are not is often dictated by a complex web of factors, including regulatory concerns, ethical considerations, and risk assessment by financial institutions. 

Understanding Restricted Industries

Restricted industries are sectors that financial institutions automatically decline for financing due to various reasons such as legal restrictions, ethical considerations, or high financial risk. This category includes:

– Ammunition or Weapons Manufacturing: This includes both wholesale and retail sectors, largely due to regulatory concerns and the potential for legal liabilities.

– Bail Bonds: Often viewed as high risk due to the unpredictable nature of the bail bond industry and its clients.

– Check Cashing Agencies: These are typically avoided by financiers due to the high risk of fraud and money laundering.

– Energy, Oil Trading, or Petroleum Extraction/Production: The environmental risks and political sensitivities surrounding these industries make them less attractive to financiers.

– Finance Sector Entities**: This broad category includes Federal Reserve Banks, foreign banks, and various brokerage and loan services, which are generally restricted due to potential conflicts of interest and regulatory restrictions.

– Gaming or Gambling Activities: Legal and ethical concerns, along with high financial volatility, place these activities in the restricted category.

– Speculative Loans: Loans intended for speculative purchases of securities or goods are highly risky and thus restricted.