How To Do a SIC Code Lookup With 5 Different Methods

In brief: 

• Looking up SIC codes allows for classifying US businesses by the industries related to their economic activity.
• Classifying businesses using SIC codes helps an organization assess the potential risks of taking on a business as a partner or client, based on what industry it’s in (e.g. potential crime, hazardous activities, economic instability, regulatory issues, or ethical concerns).
• SIC codes can be looked up by business name, found in a business’s SEC filings, crosswalked from related NAICS codes, inferred from industry-related keywords, or deduced using a drill-down table based on economic activities.

Part of building the risk profile of a business you want to have as a client or partner involves knowing what industry the business works in. Depending on its industry, a business could have a high risk of being involved in crime, have a high probability of workers being injured or assets being damaged, or simply not be in line with public sentiment or your own organization’s ethics.

One of the common methods used to classify businesses in the US is the Standard Industrial Classification (SIC) code system. Though it has largely been superseded by the North American Industry Classification System (NAICS) code system, which can handle continent-wide business classification, the SIC system is still used by some US government agencies. It can also serve as a way to contextualize NAICS codes to allow for more accurately determining the right classification for US businesses.

This article explains how to find the SIC code (or codes) for a business in order to properly classify its economic activity.

We’ll first talk a bit more about what a SIC codes lookup is, and why it’s useful from a KYB standpoint for various types of organizations.

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A SIC code lookup is a search for a US business’s Standard Industrial Classification (SIC) code. This is a four-digit code that classifies a US business by its industry. Though the SIC system has been replaced by the NAICS system, some US government agencies – such as the SEC – still use it.

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When it comes to business-to-business (B2B) relationships, a SIC code search is used for much the same reason as looking up NAICS codes: as a risk assessment process. In fact, if your company is regulated by an agency that still uses SIC codes, it’s probably required to look up SIC codes, and it might not be a bad idea to also look up the NAICS codes for businesses you’re onboarding or reviewing. 

To illustrate, here are some examples of companies that may want to know which industries client or partner businesses belong to via their SIC codes:

• Marketplaces: A business wanting to join a marketplace may be a potentially high criminal or financial risk, either to the marketplace itself or to its customers, due to the industry it’s in. Or the business may be from an industry that’s ethically frowned upon by society or other businesses in the marketplace, and so may drive away other new businesses or customers.
• Lending: A business applying for a loan may be from an industry known for poor economic performance or high rates of criminal activity. Thus, there may be a greater risk that the business will either default on their debt or just take the money and run.
• Insurance: Insurers need to know how likely a business, based on its industry, will file claims for property damage or worker injury. This lets them create a policy better suited to the risk profile of a company, and potentially also guard against fraud.  
• Financial Services: Fintechs and banks also need to be aware of the industries in which prospective client or partner businesses operate. Some businesses may require closer monitoring for fraud or other criminal financial activity if they’re from industries susceptible to those things.

Of course, assessing potential risk based on a business’s industry is just one element of a company’s due diligence responsibilities in B2B relationships. There are many other things that must be considered, such as who owns the business and whether they occupy influential political positions that could be abused.

Our free e-book below gives advice on how to meet strict “Know Your Business” regulatory requirements when working with other businesses as clients or partners, while still being able to grow your company at scale.

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The methods to find SIC codes for specific businesses generally fall into one of five categories. We’ve arranged them in the order we think are the most efficient:

1. SIC Code lookup by business name

The most effective way to look up a SIC code for a business is by the business’s exact name. This is because the SIC system classifies businesses, but doesn’t uniquely identify them, so businesses with similar operations could have the same SIC codes.

There are tools online that allow you to do single searches for businesses, and purchase records of information on them that include SIC codes. You can also inquire directly with a business what its SIC code is, but the person you get might not know what it is, or might not want to share it with another business without being clear on how you will use it.

A better alternative, though, is to use the Industry Classification product. Simply provide it with the names, addresses, and (optionally) website URLs of the businesses you want to find SIC codes for. We’ll then scan several credible sources around the Internet (including the business’ websites, if you provided them) and return what we determine to be the SIC code(s) (and other classification codes) that most accurately classify the business. 

See our guide on how to find the SIC code of a company by its name to see how our Industry Classification tool works in practice specifically for verifying SIC codes.

2. Search for the business’s SEC filings

The Securities and Exchange Commission (SEC) is one of the US government agencies that still uses the SIC system, so it’s another way to find the SIC code for a business. You can use the SEC’s EDGAR system (Electronic Data Gathering, Analysis, and Retrieval) to search for a business by its name, ticker symbol, or central index key (CIK) number. The business’s file is free to access, and contains its SIC code.

Note, however, that not all US businesses have to be registered with the SEC — only those that sell or trade public stocks — so you may not be able to use this method to find the SIC code of a smaller business that isn’t listed on a stock exchange yet.

3. Use the NAICS to SIC Crosswalk

Some tools — like ones on NAICS.com and SICCode.com — allow for converting NAICS codes to SIC codes (or the other way around). So if you’ve already looked up a business’s NAICS code using their company name, you may be able to find out the business’s related SIC code.

Bear in mind, however, that NAICS is a newer system meant to handle types of industries not covered by the SIC system (such as certain services, or computer & software businesses). So if a business is in a relatively new industry, it may have a NAICS code but no corresponding SIC code.

4. Search by industry keyword

If you have a general idea of what a business does, you can also perform a Standard Industrial Classification code lookup by industry keyword. The US Occupational Safety and Health Administration has a SIC Code system search that allows for looking up SIC codes by related industry keywords.

This can be tricky, though, because certain keywords may apply to multiple classifications (or at least their descriptions). So entering too few keywords can leave you sorting through multiple codes that may not be all that related to what you’re looking for. On the other hand, entering too many keywords can make it difficult to match them all and (therefore) find any results. 

5. Use a SIC code drill-down table

Another way to do a SIC code search by industry is to use a drill-down table, like this one on NAICS.com. This allows for starting with a general industry group and then choosing increasingly-specific descriptions of what a business does. That should point you to what a business’s most likely SIC code is (and potential NAICS codes to boot).

This is an iterative and time-consuming process, and the main downside of this method is that if you’re trying to determine the SIC code of a business you are onboarding (i.e. that you don’t own), you might not be correct in the assumptions you’re making about what the business does.

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As a company, you may have several client or partner businesses you need to assess risk for at once. Finding their SIC codes to classify which industries they’re in is just one part of that. Whether you’re onboarding new businesses or reviewing current ones, having a risk assessment process that’s speedy, frictionless, and thorough is key in keeping your customers and partners happy.

There are a few ways to achieve this, at least when it comes to the Standard Industrial Classification lookup part of the job:

• Custom rule sets: Assign risk scores to different industries, and flag businesses that exceed your company’s risk tolerance based on their SIC codes.
• Machine learning: Pull data about a business from trustworthy sources around the web into an AI system. The algorithm will determine what the most likely industry classification for that business is.
• Big data analytics: Similar to using AI, analyzing larger datasets on a business can lead to more accurate industry classification. 

Middesk’s Business Verification API completely automates SIC code searches and other tedious KYB tasks. Find SIC codes and other business verification information you need for onboarding and due diligence in minutes, instead of spending hours collecting this information manually.

An efficient SIC code lookup solution from Middesk

Your company isn’t going to be able to keep up if it’s trying to find risk-related information on client or partner businesses, one-at-a-time, through manual lookups. You need a system that can automate industry classification, for these reasons:

Increase speed: Gather and process data faster with computers and software.

Aggregate credible sources: Pull data from more reliable sources at the same time to get a more accurate SIC classification.

Maintain fresh data: Schedule recurring SIC lookups to become aware sooner if something changes in the data.

Reduce human errors: Avoid data entry and analysis mistakes that lead to inadequate due diligence.

Free up human resources: Save your risk team for cases that require a human touch, or tasks that add more value to your company.

The Industry Classification product can do all of this. Verify itself can also automate several more KYB tasks, including authenticating if a business’s basic information, formation documents, and tax registration are all properly registered and correct. To see both of them in action, contact us to book a demo.