Monthly Archives: April 2017

6 of the Riskiest Industries in the U.S.

Every industry has a certain level of risk involved. However, in the eyes of banks and other traditional lenders some have more than others. This makes it incredibly difficult for these businesses to secure a small business loan. Not willing to deal with the risks, banks and traditional lenders turn these businesses away. As a result, these businesses have increasingly turned to alternative lenders – like eMerchantBroker – that specialize in offering high risk merchant accounts. These merchant services are specifically tailored to meet the needs of each high-risk business type.

If your business is part of one of the following high risk businesses, you’ll likely have to seek a high-risk merchant account and alternative business funding options:

Firearms

Over the last few years, gun shops have had a hard time securing business funding from their banks. The firearms industry was one of the many industries deemed “high-risk” during the Obama Administration. Many firearm merchants are informed that their merchant account has been closed, and that their business is no longer welcome at their bank. In the eyes of traditional lenders, gun merchants are listed write alongside porn stores and drug paraphernalia shops.

Newspaper Publishing

Digital media continues to place pressure on newspapers. The fact that advertisers have fewer incentives to print publications – due to readers preferring real time information – is also hurting this industry. In 2013, the revenue for this industry was $33.37 billion. That amount is expected to decline to $27.68 billion in 2018, and continue to fall 3.67 percent over the next five years.

Leather Tanning and Finishing

Over the last few years, the leather tanning and finishing industry has declined. Revenue in 2013 was $1.84 billion, compared to a projected $1.66 billion in 2018. Even though experts anticipate that the industry will stabilize in the future, falling demand has caused it to be labeled as high risk. Rising import competition has also negatively impacted this industry’s performance.

Appliance Repair

For the most part, there are many opportunities in the appliance repair industry. A new report by IBISWorld revealed that prices for appliances are projected to outpace disposable income growth. However, the appliance repair industry still faces competition from manufacturers that offer warranties to cover repairs. Advancements in technology are also increasing the lifespan of appliances. This has given this industry a very high level of risk, accompanied with an expectation that revenue will fall an average annual rate of 1.5 percent over the next five years.

Business Certification and Industry Schools

In hopes to have a better chance of being competitive in the job market, more and more students are choosing degree programs over industry schools. This declining demand has forced operators to lower their prices for courses, which also negatively affects their profit margins. In 2013, revenue was $2.78 billion. That amount is projected to decline to $2.08 billion by 2018, and will continue to fall over the next few years.

Apparel Knitting Mill

The apparel knitting mill industry is considered very high risk. Most knitting takes place overseas, while U.S. companies focus on designing and branding. This has led to a revenue decline in this industry $481.3 million (2013) to an estimated $412.0 million (2018). Even so, there are still many opportunities for those who find a niche in this market.