“The loan is notable for its size: It’s roughly 54 times the average loan made through the small business aid program. It’s also notable for this: Strip clubs were specifically barred from the Paycheck Protection Program.”
CBS NEWS – The owner of one of the largest chains of strip clubs in the country, Rick’s Cabaret, as well as a chain of military-themed sports bars called Bombshells, got $5.4 million from the government’s small business coronavirus relief fund.
The loan is notable for its size: It’s roughly 54 times the average loan made through the small business aid program. It’s also notable for this: Strip clubs were specifically barred from the Paycheck Protection Program.
RCI Hospitality, the owner of Rick’s, received funding from the Paycheck program in early May, according to its quarterly financial statement filed with the U.S. Securities and Exchange Commission.
RCI said in the filing that 10 of its restaurant facilities applied for loans from the Paycheck Protection Program and received a total of $4.2 million. Another $1.1 million government-backed loan was granted to its “shared-services subsidiary,” according to the filing. RCI doesn’t say what that subsidiary does.
The Paycheck Protection Program, run by the U.S. Small Business Administration, is meant to help small employers survive the crushing impact of the coronavirus pandemic through a total of $660 billion in forgivable loans charging just 1% interest.
The deadline for applications was to be June 30, but Congress voted earlier this week to extend the deadline into early August so that some $120 billion in still-unallocated money can be tapped by small businesses.
The PPP has drawn criticism for allowing larger companies, including publicly held enterprises, to use the initiative for funding while many other small businesses were initially shut out.
Publicly traded RCI has 2,200 employees and a total stock market value of just over $125 million. The company said in the filing that none of its PPP loans will go toward funding its “adult nightclub” business. It’s not clear from the filing how that would work.
RCI, which changed its name from Rick’s Cabaret International in 2014, gets more than 80% of its nearly $200 million in revenue from its strip clubs … Read more.