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laughs all right so we are live on YouTube I think everything's up and running hello and welcome YouTube let me make sure that we are that we were are we up in streaming yep perfect well hello and welcome YouTube to thinking outside the bank as today we're talking about a really cool topic what are si si and NAICS codes and one of the things we're gonna really focus on is how to remain ethical and honest while selecting lower risk codes so that we can maximize our funding that's man I can't stress that enough because we talk about that a lot about how you don't want to be in an industry but then also you don't want to be unethical in life that's absolutely right so first of all just in case those who don't know who we are cuz we get a lot of new subscribers each and every day we are the wise guys in ties my name is Joseph Smith this is my business partner mr. ray Fleming and we're not wearing ties today because it's the summer and we're in Arizona and it's hot but folks we're here to help you get the tools and the resources that you need to start build and grow your business so if you're interested in learning more click on the like and subscribe and there's our contact information so you can reach out to us and we can start working with you alright so si si codes come from the SCC so these the stands for the standard Industrial Classification supported to code right that's generated by the IRS right we're a RS SCC they all kind of work together it's the US government right now this IDs your business's primary activity the first and second digits are a major industry group and the third digit is you're just a regular industry group and then the fourth digit is your industry now if you want to know more about what the codes are what the industries are I have a link there on the bottom of your screen take a screenshot and go check that out but here's the important thing this was this was designed for by the IRS to help them understand and track the the the putting you into a category all businesses should claim the same type of deduction so this is how this how this is how these codes were originally designed however lenders came in and they started kind of hacking the system and using these classifications to help them assess risk so but that was the how it originally started but these categories are older categories and so what then later happened was we we ended up having a lot of new industry types come and we needed another coding system but why is this important why are the si si codes so important why are we talking about it today well if you look at it if you went to Experian or any other business credit reporting agency they have factors that influence your score and a number of them are listed up there in your screen but you'll see number two is the risk is so D associated with the company's industry sector and this is probably the the second highest reason why people have low scores and they don't know what to do with it right payment history is the number one factor that really controls what your score is but the second highest factor is your industry sector and we're going to talk a little bit about that today of course so the IRS see they used or talked about they use these codes because they check to see that your business's tax returns compared to that of other people and other businesses in the same industry now if your deductions are unlike any other business in the same category then that means you could be audited right that's that's why the whole code was created so that they could look for anything outside the norm or outside the patterns now why is that important well it's important to know who's looking at these codes and what they're using them for but remember I said that lenders hacked the system they did it to assess risk so what they wanted to do is they wanted to find out okay all all business has some form of inherent risk but how do we put that on a spectrum from low risk to high risk and so I mean many I mean if you're going to work as a lineman right for The Electric Company climbing up those tall poles is that a high-risk job what about an Alaskan fisherman in the Bering Strait yeah I've seen the show right but also businesses have a lot of risk we're going to talk about and show you today which businesses are in the high-risk categories and so businesses that are labeled high risk they may you may be in a situation where you have the wrong si si code that happened to one of our businesses you remember oh yeah we got in labeled what credit repair yep and that's a high risk industry and but we don't do credit repair we do not know we've thought about it but no we we uh velocity you know credit banking can ultimately help you repair your credit but yeah we don't specialize in but once and see this brings up a good point because when it comes to your code your industry code you actually choose it but if you don't choose it it'll be chosen for you and that's what happened with that business is we didn't get ahead of it in time and choose the right code and we allowed a lender to assign a code to us and then it really gets hard the best thing to do is just choose the code right on the first try and then you don't have any issues right because then you have to challenge it and go back and forth you can be done and we'll talk about that at the end I've got a slide on that you know I want to give a big shout out we've got Joel and we got Latonya and we've got will that are here on the webinar thanks for joining as we're really trying to help people understand their si si codes and their naa IC codes but that just sort of doesn't roll off the tongue very well but we're talking about why this is important like why does risk matter well it has to do with money lenders hesitate to do business with businesses that are high risk right so that means when you're high risk you either going to get stricter underwriting guidelines or you're going to be denied all together did you want to elaborate more on that because you talk a lot to people about risk all the time well so stricter lending guidelines especially so if you're anything else in a high-risk industry they're gonna want to look much closer at it to see how you doing in that situation so with that being said the high-risk industries could be anything not necessarily work-related high-risk for example we're talking about Alaskan fishermen doesn't necessarily have to be high risk like that the actual business itself the likelihood of that business going under that's the high risk industry so real estate that can be considered high risk even though you I think real estate is one of the safest investments real estate businesses tend to be a little bit higher risk and but you've talked a lot to people about what that risk actually translates I like we talk about risk but what what is that what does that tangibly look like for somebody if your risk is high what does that mean for you versus if your risk is yeah so if your risk is higher that means your rates are gonna be higher your interest rates your terms are gonna be shorter you're gonna have non favorable lending terms right that's the best way I put it and the lower risk or the better industry that you're in that means the more favorable terms the better your credit is the better the rates you're gonna get perfect that's that's what we talked about the si si codes but then we talked about the fact that those are older codes and well what happened through time is there have been new industries like the internet has brought about so many different new type of industries that weren't previously classified in the si si codes and so you know like take software for example software I mean there's so many sub branches of that so there is a whole new coding system that came out and it's called the North American industry classification system or NAICS codes and what the NAICS does is it collects analyzes published publishes stats but the US economy they define businesses by what they do and they have broader categories than the SSE so the S I see really has a ton of codes for a lot of businesses and the and the North American industry classification system also has a lot of codes but they're a lot broader now it's important that I also put a link down there where you can go and find the NAICS codes what you should be doing with the information take a screenshot of this from which choose your si si code choose your NAICS code you're gonna find that based off of the business that you're in you might find that there could be multiple codes that apply so then we've got to really then look to see how are we gonna choose which code that you should go with alright so let's talk about so you select the code that's the most important thing that's your takeaway and if you don't it will be selected for you so every time you fill out a loan application you might not realize this but or you open a bank account for your business you're asked what industry type are you in well when you're asked that question you are choosing your NAICS code you're choosing your si si code and so and you don't even think about it si many business owners they don't remain consistent hmm oh I'm in real estate or I'm in development or I'm in you could say succinate consulting right and so and each of those has a different code now why I told you you need to look up your code we've already given you the links in the past slides I'm where to look up your si si code and where to look up you're in the NAICS code you need to when you are filling out applications with the bank or the loan use the verbage that's in the code listing use the actual code every time so when you do your taxes there is a form there's a place to put in your si si code you should put in your si si code right every time there are multiple codes and they lead to these codes can lead to a low credit rating if you choose the good ones right when I say the good ones the low-risk ones but you've got to be honest and ethical and we'll talk about that and moment but let's talk about these codes and what what the industries are see there's high-risk industries these are the ones that are subject to stricter underwriting guidelines if so we're talking about if you're in agriculture or Forest Products auto recreational vehicle or boat sales courier services computer and software related services dry cleaners entertainment adult entertainment is considered restricted so that's a different category we'll talk about that in a moment but just regular entertainment general contractor's gasoline stations convenience stores healthcare specifically nursing homes assisted living facilities in continuing care retirement centers special trade contractors hotels motels jewelry and precious stones and metals wholesale and retail limousine services long distance or over the road trucking so many of our clients are over the road truckers and they don't understand why they can't get any money well it's because you're in a high-risk industry right so mobile and manufactured home sales phone sales and direct sales direct selling establishments real estate agents brokers real estate developers and land sub dividers a lot of people have real estate businesses and that's high-risk restaurants are drinking establishments software or programming companies taxi cabs including the purchase of medallions travel agencies and the like so these are the high-risk industries that are out there that if this is what you put down as your business then you are going to get stricter what are stricter underwriting guidelines means that you might get higher interest rates lower limits you might have to provide more documentation but so then there's also the restricted industry so before we were showing you high risks these are industries that you still can get funding for if these are your business if that's your business but these are the types of businesses where you cannot get any funding for so if you're into a munitions or weapon manufacturing wholesale or retail BailBonds check cashing agencies energy oil trading petroleum extraction or production if you're in finance I mean how many people do lending or they they say they're into finance right well reserve banks foreign banks Thanks just bank holding companies loan brokers commodity brokers security brokers mortgage brokers mortgage bankers mortgage companies bail bond companies and mutual fund managers right you cannot get any funding if the if this is your business so sometimes by just putting the word finance into your business name you create as you say confusion because now they think you're one of these companies the word investments yes gaming or establishment or gambling activities you know like casinos loans for speculative purchases of securities or goods pawn shops political campaigns right we're coming up into the political campaign season right public administration so we're talking about city county state or federal government agencies and x-rated products entertainment so all of those are restricted industries so that any of these are your industry or maybe you've done a play on words right you put something in there but it's not really your industry you could get miscategorized and then that could really be one of the reasons why you're not getting the results that you want so who else uses these codes right we've talked about lenders the banks use these codes the insurance companies use these codes and the business credit reporting agencies use these codes they check to see if you're in a high risk industry now some of these codes trigger automatic denials like we talked about in in this previous slide here if the if your codes are related to anything here that's an automatic denial there's nothing you can do about it right but they can also lead to higher premiums higher interest rates and lower credit limits just by having the wrong code associated or a high-risk code associated to your business so we need to make better si see choices right it's your choice we talked about being honest and ethical right I mean if you're a liquor store right which is a high risk industry you're not gonna say that you're in software development right do you know you know no we're not we don't want you to choose a marketing or consulting right no no we want you to choose the business code that best fits but listen when you go and you look up those codes that I shared with you those links on the previous screens and we should put those in the description those links as well for si si and NAICS what we'll do is those will be in the description below for later if you want to watch the rear watch this again later so but what you want to do is you want to look at your code and the codes that apply to your business now if more than one code applies we need to look at them and choose the one with the lowest risk if you look and you see that wow there's about like you know five to ten codes that apply but six of these are high risk well then let's go like there's people who could be in a financial services business right but they also develop software right so which would you choose develop software or financial services because financial services is on automatic denial right both yeah so you might be in real estate investing but you might also be in marketing all right so real estate investing high-risk marketing low-risk which one would you choose marketing exactly so no deception choose the code you see if you if you are being deceptive like a lot of people try and say oh I'm in business management or I'm in I'm in consulting and then they look up your your website and they see that you're selling real estate well then you're gonna risk denial is because now you're being unethical you're being dishonest and then there's once you once you get labeled as unethical and dishonest in the lending community that is a millstone around your neck it you just can't get it can't get away from that it's it's alright there's like this blacklist mm-hmm exactly so what if your si si and your and your NAICS codes are wrong right so sometimes you chose the incorrect code right or it was chosen for you or you might have been inconsistent and it's listed different places see that's another thing that leads to denials if you have more than one code listed in all these different places and they're showing up that that is a red flag that's true because now we don't know we have confusion what kind of business are you in because this lender in this Bank and and the IRS and all these different places have you listed it as a different type of business so list your industry codes correctly with the Secretary of State the IRS and the bank so with the Secretary of State you know there's different forms that you fill out and you can let them know what industry that you're in some people leave it blank don't leave a blank right look up your code use the verbage that's listed with your code and put that in everywhere with the IRS when you file your tax returns put in the S AC code some people leave it blank right because you don't have to well but the problem is if you don't if you leave a blank one will be assigned to you and let me ask you this question if you're a lender and somebody's applied for you for funding and they have not supplied an SI C code or an NAICS code what code would you choose for them a low-risk code or a high-risk code if you're gonna choose as the lender well if I'm the lender I'm gonna choose the high-risk right so you can charge more money on interest absolutely don't leave it up to your lenders to choose because they're not going to make the best choice for you well they also I mean they're reducing their risk as well you know it's better to just assume the worst if you're a lender right exactly so okay so what happens we talked about if the codes are wrong well you need to dispute with the business credit reporting agencies dun & bradstreet business Experian Equifax small business you need to let them know that the codes are wrong now they'll initially say ok and they'll make the change but then they'll do some research and they might say well actually it came back from independent sources that your code is whatever and so they're not going to change it but then you have to go back and say look here's my code with the secretary of state here's my code with the IRS here's my code at the bank they all got it right you got it wrong and you need to change it and so that's kind of how you have to fix it so you monitor your business credit reports and you follow up with the agencies as needed until they make the change and they will but it could take a while for for them to actually come around you've got it because they'll make you provide the documentation and they'll make you jump through the hoops but eventually you should be able to get that corrected if it is incorrect alright well that's really all I had for today folks now for those of you who tuned in a little bit late you're like hey Joseph show me those Ling's right well I'll go back and show you real quick because I know some people were wondering with here's the link to find on the bottom of your screen the link to find your where that you can find the si si codes right the standard Industrial Classification right okay so take a screenshot of that so you have that go look up your code right now then we talked about your NAICS codes right well the link is on the bottom of the screen take a screen shot of this right go look up these codes right you need to find out which codes work best for you and stay off of the high-risk industries right definitely stay away from the restricted industries we want you to be honest and ethical with all that you do now folks this can be a little bit confusing and there's a lot of moving pieces to building your business credit and getting funding but when you choose the right code for your business and it's a low-risk code this opens up so many lending opportunities what you don't want to do is slam the door shut on lending opportunities because you either chose the wrong code or you didn't choose it at all and you let somebody else like what happened with one of our businesses that got chosen as a credit repair company right so that took a while for us to fix but we did get it we did get that straightened out but definitely I'm sharing this with you so that you can avoid some of the common mistakes that people make when building business credit in trying to get direct funding for their business so folks I want to thank all of you especially those in our webinar colette joel karen Saxon will I want to thank you so much for coming out join us tonight tonight for a credit banking mastermind it's live we're going to be going over what are we going over tonight is it the actual credit credit banking strategy tonight tonight well we've wrapped it up last week tonight is a business credit I think yeah business credit and Knicks with oh my goodness this is such elimination this is like our most requested topic that we discussed I mean we get so many requests somebody's like show us how to use business credit with the credit banking strategy so we're gonna cover that tonight it's going to be pretty amazing I want to make sure that you tune in and see how you can combine two awesome financial strategies and reap the rewards right because ultimately we want to help you create an economy that you can control oh hey can we put the the link for this I see codes up again we'll put it in the bottom of our for the webinar for the webinar folks for the webinar folks hey Saxon how you doing buddy good to see you on here I don't know what you're asking for you mean oh yeah yeah go back to the one for the si si code yeah let me make sure I had that one right perfect and then I'm gonna throw that in the chat here for anybody that wants it and did you need the naics one yeah drop that in the chat three folks and then also in the chat is the wise guys enticed forward slash event link to all the zoom webinars that we do each week there's four different zoom webinars feel free to tap into a two that are on business finance funding and how to build and grow a successful business half an hour Tuesdays and Thursdays during lunch time and then we also have Tuesday nights credibility banking how to get out of debt strategically case study case study each week real life scenario situations Thursday nights and Thursday nights we have our all-new real estate investing masterminds with deal or no deal with deal or no deal so that's exciting to where real life deals are they a deal or not last week was really cool yeah we got a lot of good features a auction auction so people that were in the webinar got to bid on the property and kind of see what if they bid too much or not so that's pretty cool all right guys and gals any other questions so I think I saw one question like well they didn't but anything so they don't know what code might have been selected for him well that's when you've got to set up your DMV profile you've got to set up your business Experian and business Equifax cuz they're gonna go look it up and then you'll see what's there but don't don't try to spend so much time finding out what somebody put for you go find out your code and then you be proactive and make sure you put it everywhere and make sure it's the same everywhere and then you'll be fine yeah all right and then if you want to know more about business credit how to build business credit we put out that business credit master class on YouTube so the wise guys entice it's an hour and a half training on YouTube goes through the entire process of how to build business credit step-by-step so make sure you've checked that out absolutely well folks we've reached the end of our time we want to make sure that you guys get the maximum amount out of this time it's lunchtime and get you back back to your daily routine join us tonight for business credit and credit banking combined strategy and on behalf of myself Joseph Smith and Ray Fleming we're the wise guys and Ty's helping you get the resources you need to start build and grow your business and we want to say good night