SBA Cannot Exclude Erotic Entertainment Businesses from Applying for PPP Loans, Mich. Federal Judge Rules

DETROIT –– A Michigan federal judge has ruled that the Small Business Administration may not bar erotic entertainment businesses from obtaining loans under the CARES Act’s Paycheck Protection Program on the basis that they present entertainment or sell products of a “prurient sexual nature.”

On May 11, Judge Matthew F. Leitman of the U.S. District Court for the Eastern District of Michigan granted DV Diamond Club of Flint d/b/a Little Darlings’ motion for a preliminary injunction, requiring the SBA to notify lenders that applications for PPP loans cannot be denied based upon an “Ineligibility Rule.”

The PPP Ineligibility Rule provides …