Strip Clubs Not Eligible For Coronavirus Stimulus Loans, Sues Government

A number of strip club owners are suing the federal government for their right to apply for stimulus loans for small businesses affected by the coronavirus pandemic. Niche businesses like strip clubs, however, are excluded from availing this benefit under the U.S. Small Business Administration (SBA).

In March, Congress approved a stimulus loan program coursed through the SBA. Under this program, small businesses and entrepreneurs may be eligible to get $10 million to cover for their staff's pay and ensure no layoffs.

The government agency, however, doesn't cover small businesses and entrepreneurs engaged in "live performances of a prurient sexual nature." Other niche businesses that cannot apply for the loan include political operators, membership-based clubs, and religion-promoting organizations.

In Portland, where strip clubs earn the most per capita compared to other joints across America, 54 establishments will not be able to apply for the loan.

"The venues where I work aren't able to get anything," Portland burlesque dance Abigail Rhys said. "I really don't think that it's fair that people who are doing things that are completely legal and pay their taxes aren't able to get any help. I don't think it's fair at all."

Strip clubs had to close down in the middle of March because of the stay-at-home orders. Many applied for the stimulus loans but were consequently rejected.

According to CNN, three lawsuits have been filed by niche businesses as of Tuesday. These are the strip clubs Little Darlings in Michigan and the Silk Exotic Gentlemen's Clubs in Wisconsin and Milwaukee. A political firm in Denver, Ridder/Braden Inc, also sued the SBA for "infringing on their free speech" and their constitutional rights.

"COVID-19 is not just ravaging the health of Americans, it is also ravaging the Nation's economy," Ridder/Braden Inc's lawyers stated in the court documents. "The government does not have a legitimate interest during this global pandemic in preventing small businesses from obtaining much needed cash to cover payroll and health insurance for their employees just because these small businesses exercise fundamental constitutional rights."

Silk's owners said that, due to the lack of funding, they might not be able to reopen even if the pandemic is over. Their lawyers said that the establishment should not be denied the loan because their form of entertainment is "non-obscene (and not prurient), appeals to healthy human interests and desires, and is in full compliance with the numerous licenses and permits."

SBA said it would not comment on pending litigation.