Paycheck Protection Program Extended to Aug. 8

LAS VEGAS—The deadline for small businesses to apply for the Paycheck Protection Program has been extended to Aug 8. For adult entertainment companies, the issue of receiving approval for a PPP loan has been a sticky wicket — some have received loans, some have been flatly denied loans and some have filed lawsuits against the Small Business Administration for not enabling the loans. The PPP is part of the CARES Act signed by President Trump and designed to help employers cover payroll, rent and other expenses during the COVID-19 outbreak. The subsidies come as federal loans, but those loans can be forgiven if businesses use at least 60 percent of the funds for payroll. The original deadline to apply for the PPP was this past Tuesday night. But $130 billion still remained in the fund, out of $660 billion allocated, and Trump gave approval of the extension on Saturday. Today, the SBA released a full list of companies that have already been approved for loans. (A full list is available through access here.) According to the SBA list, a number of adult entertainment companies were approved for PPP funds, including Spearmint Rhino Consulting Worldwidem which garnered $350,000 in PPP money. The adult club owner operates the Spearmint Rhino, Dames N’ Games, Blue Zebra and California Girls brands at 20 venues in California, Minnesota, Nevada, Florida, Iowa, Idaho, Kentucky, Australia and the U.K.; and Cybernet Entertainment, the operator of the Kink.com, received $350,000. Federal courts have gone both ways on whether the SBA’s eligibility requirements for a PPP loan contradict the plain text of the CARES Act, which denies loans to businesses of a “prurient” sexual nature. In May, a federal judge blocked the SBA from denying federal coronavirus relief loans to multiple Wisconsin strip clubs based on their businesses’ sexual nature, ordering the government agency to start facilitating loans That judge ultimately found that the clubs would have a likelihood of success proving the SBA regulation violates the First Amendment and the equal protection clause of the Fifth Amendment and considered the government’s arguments for excluding the clubs from relief due to the non-obscene sexual nature of their nude and semi-nude shows to be tenuous. Just last month, another judge found just the opposite with a Buffalo strip club. That judge said the club was unlikely to prove that the SBA’s exclusion of adult entertainment businesses from the PPP violates its right to equal protection and freedom of speech. With the Aug. 8 extension, companies can submit applications through local banks or fintech companies, like Intuit, Square or PayPal. Companies that eventually score PPP loans can also receive complete forgiveness using Form 3508EZ. If companies aren’t approved for forgiveness, the program now allows borrowers five years to repay the loan at 1 percent interest. If a borrower received the loan prior to June 5, 2020, they must negotiate the five-year term with their lender.