Topic: Government's Responsibilities
Create NEW jobs? I tried and the Govt. won't let me The U.S. Government keeps trying to get businesses to borrow money and expand. Yet, they (The Small Business Administration) refuse to give my company a disaster loan from a flood last March because I own a Gentlemen's Club.by Big Louie
(libertarian)
Monday, January 12, 2009
While our leaders in the Federal and State Governments are talking about trying to create jobs with another massive stimulus package (read BAILOUT), they have refused to LOAN my company the money to rebuild my company's family riverside resort, which was destroyed by a flood in March 2008, because I also own a Strip Club.
Yes, I can easily pay the loan back, that is not the issue nor reason for denial.
Yes, it is a FAMILY resort. It has Camping, canoes, fishing, paintball, cafe etc etc.
Yes, I do have flood insurance. However, this was a record flood that wiped out much more than we were covered.
Yes, I would rebuild a family resort.
Yes, this is a LOAN, not a bailout. We would be required to pay the loan back, with interest
Yes, this would create JOBS! From construction, to producing the materials needed to construct, to the actual staff who would be working when it was open.
How's that for a stimulus?
The Government, however, says that they cannot loan me money because my companies create too much of a percentage of my revenue through my club. When I asked for the EXACT percentage needed to disqualify me, they refused to answer.
When asked to define exactly what part of my business or sales met their definition of a "sexually prurient business" they refused to define it.
The problem with this law is that it is too ambiguous. It does not define the "de minimus" amount nor does it define exactly what is of a "sexually prurient nature"
Luckily, there are dozen of States which do define it in their regulations.
Acts of a "sexually prurient nature" are OBSCENITY! In fact, obscenity or obscene displays are illegal in my state, Missouri. Read this for the legal description of Obscenity. #12 a-c
We do not fall under this description. If we did, we would all be in prison. The failure/refusal of the SBA to define which materials that we sell or perform are of a "sexually prurient nature" or "obscene" shows that they themselves know that their actions are unjustified.
The same can be said of their "de minimus revenue" clause for which they refuse to give an exact figure.
We have exhausted our appeals with the SBA and are now moving on towards Federal Court. Lucky for us, the law is on our side and we will most likely prevail. It just seems insane that we can't borrow money to help the economy because we have a Gentlemen's Club when the Feds are GIVING Billions (if not Trillions) to the people who stole it from us in the first place.
I hope that some "real" journalists would like to talk to me about this issue.
My email address is:
manager@babarum.com
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Is the Club in the premises of the Resort? Is it fully nude or just topless? What is the name of the Club and where is it? Is the club a tourist attraction in Missouri? Can I get an SBA loan to start my own strip club? Why not an SBA loan for a brothel in Nevada?
These government idiots are all hypocrites. I am pretty sure that if your club is one of the nicest ones in your state, many government people and those lawmakers have been your customers. Maybe the local SBA guy you are dealing with has been your customer, had many lap-dances at your place and he does not want his wife to find out! He will probably say nasty things about your sexual deviant business, blah, blah, blah....
Good luck with your fight and I hope you keep those club revenues in the same direction as your customer's private areas: UP!!
First, I would like to say that I wrote this piece due to the enormous anger I feel at the Govt. It is my hope that a national news reporter will find this piece and do a story on this example of the idiocy of our govt.
PLEASE, pass this story on to whoever you might know in the media and I will gladly share the enormous amount of details with them.
To answer a few of your questions
The Club and the resort are in different Towns. 6 miles apart. They have different management, operations etc.
The SBA regulation was passed in the 1990's to prevent the SBA to from loaning money to Brothels in Nevada.
In 2004, This club was ranked #1 in the USA by "the ultimate strip club list. www.tuscl.com
I can name multiple state legislators and senators who have been here, but they are State, not federal officials and have no say what the SBA does. However, I know several local officials along with a couple of state reps who would side with me because of the fact business that is in question is NOT an adult business and would produce dozens of good jobs locally.
Seriously, I have started sending links to this post to several news orgs and would appreciate if you did the same
I think I'll copy my comment from reddit on this matter:
Let me see if I understand this correctly:
1) The company you own had a resort that was destroyed by a flood.
2) You had insufficient insurance coverage, because such a large flood is very uncommon, and so you didn't think to have proper coverage. Is it not one of the major purposes of insurance to safeguard against very uncommon events?
3) Because of your oversight, you want the government to give you a loan to rebuild the resort. What would be their guarantee that another record flood wouldn't destroy it yet again, and leave you unable to pay back the loan due to insufficient insurance coverage?
4) Considering that you are a libertarian, would you not agree that the government really shouldn't be obligated to give you money in this situation, and, indeed, shouldn't give you money?
5) When the government won't give you a loan, you assert that they are trying to prevent you from "Creating new jobs", and use your own interpretation of the law, apparently without proper understanding of the meaning of legal terms, to come up with an argument that is simply incorrect. While IANAL, I can look up things reasonably well, and am not quite so biased:
* de minimis means essentially an amount so small as to be utterly insignificant to you or the government. If you own a strip club, the revenue from that clearly isn't de minimis. If you sell a single prurient postcard in a shop at the resort, and make $1 in revenue from it in an entire year, that's de minimis, but would also be very bizarre. Examples of de minimus in federal taxes, for example, include $50 being considered the limit of de minimus for gifts to employees, and $600 being considered de minimus for real estate transactions.
* "Prurient sexual nature" is not the same as "obscene", and the definitions of a completely unrelated law have little bearing on the SBA regulation anyway. While I don't know exactly how the SBA is defining the term, it seems clear to me that the vast majority of people in the US would consider a strip club to be prurient.
6) As one last note, I must admonish you for your use of the term "gentleman's club". These are gentleman's clubs. Those who would go to your establishment are not gentleman.
The SBA guarantees a loan that a bank would otherwise not do. Because the SBA exists, banks will reject your loan application on purpose so that you can get the backing of the SBA to protect their loan. In the event of a default, the SBA insures the bank's loss. If you are the bank you will probably require your higher risks borrowers to et SBA approval or you do not give them the loan.
So the main problem is that the SBA exists.
I assume that Big Louie would rather not use the SBA, but since it exists, and as a tax payer he is paying for it anyway whether he uses it or not, he might as well use it. Example: I don't like the concept of public education, but since I am paying for it anyway whether I use it or not, I send my kinds there even though I would rather have it all private.
Now if the SBA refuses to back Big Louie because of the big flood issue, then you may have a point. Nevertheless, the Government misuses our money to rebuild New Orleans and other huracaine affected coastal areas that are also at a higher risk of a big flood again.
If SBA uses the strip club as the main rejection of his loan, then the SBA is discriminatory. That would be like denying a 15-yearl girl a public high school because she got pregnant, or rejecting a social entitlement program to a woman who happens to earn a living by taking her clothes off. That should not matter.
As much as I dislike government intervention, if a program is there and I qualify, I will use it as probably does Big Louie. After all, we all pay for these programs even if we don't use them or don't need them.
A brothel is a small business and it is legal in Nevada. There is no federal law agaisnt such businesses. Only state and local laws agaisnt them. The current SBA regulation agaist loaning money to brothels is wrong.
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