A Michigan strip club says the small business loan program geared toward helping small businesses stay afloat amid the coronavirus is unconstitutional.
A lawsuit filed in federal court by Little Darlings alleges the Small Business Administration (SBA) and the Treasury violated the Constitution by preventing businesses that have "live performances of a prurient sexual nature” from receiving any relief.
The strip club is seeking help from the recently enacted Paycheck Protection Program under the CARES Act. The loans are awarded on a first-come, first-serve basis until the money allocated is depleted.
The criteria for qualifying for a small business loan has changed since the plan was first introduced. Currently, the requirements are that the business has to certify its “current economic uncertainty makes this loan request necessary.” Businesses don’t have to prove a sharp sales decline or the imminent threat of closure. Businesses with fewer than 500 employees qualify, but there are still eligibility restrictions.
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