Court Rules Cheektowaga Strip Club Cannot Receive PPP Loan

If things weren't already tense for local businessman Peter Gerace, Jr., earlier this week he received some more bad news related to his Cheektowaga Gentlemens club.

According to reporting by The Buffalo News, Pharaoh’s Gentlemen’s Club lost an appeal in Federal Court trying to overturn the denial of their application for a loan from the Federal Paycheck Protection Program.

Back in 2020 Pharaoh's applied for a PPP loan, which is offered by the Federal Small Business Administration to help businesses that have been negatively impacted by the COVID-19 pandemic. The loan application request, which amounted to almost $350,000.00, was denied by their banking partner because they were told strip clubs are barred from participating in the federal loan assistance program.

Thinking this was unfair and unconstitutional, the business chose to file a suit in federal court claiming the US Constitution allowed them the ability to apply. The initial lawsuit requested the SBA not be allowed to exclude strip clubs from the program.

Their initial court claim was rejected by a federal judge last summer. They filed an appeal and that appeal was also rejected. The Federal Court ruled that Congress allowed the SBA to exclude different types of businesses from the program if they so choose.

PPP loans are broadly available, but the government has decided not to subsidize certain types of businesses, even if they engage in constitutionally protected activities... The government does not violate a plaintiff’s rights by declining to subsidize its First Amendment activities.
-US 2nd Circuit Court of Appeals

According to statements by the attorney for Pharaoh's, they are continuing to explore their legal options.