Among everybody’s favorite “small businesses” that shut down due to the pandemic earlier this year were our fine country’s strip clubs. And like every other business in the “hospitality” industry, these clubs hoped the government’s Paycheck Protection Program (PPP) would help them stay afloat during the shutdown.
But a little known provision in the Trump administration’s program that bans companies that “present live performances of a prurient sexual nature” from participating has stopped some clubs in their tracks. Several have sued and Federal judges have rebuked the SBA for excluding them, according to Reuters.
It’s the latest in a growing list of criticisms of the program, which has been rife with waste, fraud and abuse since its inception. Meanwhile, some legitimate businesses in the hospitality industry, like gentleman’s clubs, can’t get access to funds. It’s still unclear if the SBA will even work with the clubs that have won court orders.
Brad Shafer, an attorney who convinced a federal judge in the U.S. District Court for the Eastern District of Michigan to issue a ruling in May ordering the SBA to work with more than 50 strip clubs, said: “The ball is in the SBA’s court right now. We still don’t know the end of this story.”
Reuters was able to find 36 organizations that represented “dozens” of strip clubs across the country that were approved for between $11.15 million and $27.95 million from the program. Some businesses had to wait until after the court’s decision to get their funding.
John Meehan, who owns Cheerleaders strip clubs in New Jersey and Philadelphia, was denied by PNC for loans. He said: “I wasn’t complaining, but I was scratching my head.”
A spokeswoman for PNC said she didn’t know why the loans were denied: “Under those guidelines, applicants were responsible for certifying that they met applicable SBA eligibility requirements, and lenders were not required to independently verify such eligibility.”
RCI Hospitality Holdings Inc., which operates more than 35 strip clubs, had better luck and was approved for between $4.45 million and $11.7 million in funding. Representatives for the company declined to comment.
One dancer, Jordan Lawrence, concluded: “These people need to come out here and interact with people like me because they are interfering with our livelihood. We have bills to pay too.”