In general, neither OnlyFans creators nor OnlyFans agencies are eligible to receive SBA 7(a) or 504 loans for their businesses.

OnlyFans creators were allowed to obtain first-round PPP loans under the CARES Act after courts determined that the language of the CARES Act applied to a broader range of businesses than the Small Business Act which governs eligibility for the SBA 7(a) and 504 loan programs. However, Congress made it clear in the second-round PPP loan authorization legislation that they had not intended for “adult” businesses to be eligible for PPP loans, and such businesses were explicitly excluded from subsequent PPP loan programs.

However, if an OnlyFans creator invests a portion of their OF income into the creation or acquisition of a new, non-adult business, then that new business is generally eligible for SBA 7(a) and 504 loans as long as the business meets all the other eligibility criteria for those programs.

Another financing option for adult business owners is to get loans from private lenders. For example, Blackburne & Sons has financed a number of adult book stores, adult lingerie stores, and even a swinger’s club. Strip Club Financing is another lender that works with adult businesses that have at least $3 million in annual revenue and $1 million in annual EBITDA (pre-tax profit). They offer cash flow, real estate, and asset-based loans of $1-25 million. Many other lenders exist as well, and you’ll want to shop around to make sure you are getting a good interest rate since some lenders will try to take advantage of the fact that most banks won’t do business with you by offering predatory loan terms. If you want help finding a loan or investor to fund your business, email me through the form below and let me know what kind of business you have and how much money you are trying to raise.

References

• 13 CFR 120.110 — What businesses are ineligible for SBA business loans?
  • “Businesses which present live performances of a prurient sexual nature [are ineligible. Additionally, businesses] which derive directly or indirectly more than a de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature [are ineligible]”
    • The meaning of “de minimis” is interpreted in SBA SOP 50 10 6 as 5% (meaning a business is ineligible if it receives more than 5% of its gross revenue, directly or indirectly, through the sale of products, services, or the presentation of any depictions or displays of a prurient sexual nature).
      • When is revenue “indirectly derived” from the sale of certain products or services? We don’t have a concrete answer, but we can guess based on what 13 CFR 120.110(h) and [SBA SOP 50 10 6] say about indirect revenue from illegal activities:
        • “Applicants that are engaged in illegal activity under federal, state, or local law are not eligible. This includes Applicants who make, sell, service, distribute, or promote products or services used in connection with illegal activity, unless such use can be shown to be completely outside of the Applicant’s intended market.” — Part 2, Sec A, Ch 3, Item 8
        • “…financial transactions involving a marijuana-related business would generally involve funds derived from illegal activity. Therefore, businesses that derive revenue from marijuana-related activities or that support the end-use of marijuana may be ineligible for SBA financial assistance.”
        • “[The following indirect marijuana businesses are ineligible:] a business that derived any of its gross revenue for the previous year (or, if a Start-Up Business, projects to derive any of its gross revenue for the next year) from sales to [direct marijuana businesses such as businesses that sell, grow, or produce marijuana, marijuana products, or derivatives] of products or services that could reasonably be determined to aid in the use, growth, enhancement or other development of marijuana. Examples of Indirect Marijuana Businesses include businesses that provide testing services, or sell or install grow lights, hydroponic or other specialized equipment, to one or more Direct Marijuana Businesses; and businesses that advise or counsel Direct Marijuana Businesses on the specific legal, financial/accounting, policy, regulatory or other issues associated with establishing, promoting, or operating a Direct Marijuana Business. However, for purposes of illustration, SBA does not consider a plumber who fixes a sink for a Direct Marijuana Business or a tech support company that repairs a laptop for such a business to be aiding in the use, growth, enhancement, or other development of marijuana… Indirect Marijuana Businesses also include businesses that sell smoking devices, pipes, bongs, inhalants, or other products if the products are primarily intended or designed for marijuana use or if the business markets the products for such use.”
  • “Private clubs are businesses which limit the number of memberships for reasons other than capacity [are ineligible]. For example, a men’s or women’s only health club is not eligible…[however] certain businesses, like fitness centers that market to one gender, may be eligible if they permit both men and women to join…”
  • “Businesses engaged in any activity that is illegal under Federal, State, or local law [are ineligible]”
  • “Businesses located in a foreign country [are ineligible]”
• DV Diamond Club of Flint, LLC v. United States Small Business Administration
  • Appeals Court affirms lower court decision that businesses which present “live or recorded performances of a prurient sexual nature” are not automatically ineligible for PPP loans under the CARES Act
• SBA SOP 50 10 6 — The SBA’s eligibility requirements for lenders and Community Development Companies (CDCs) and the policies and procedures governing the CDC/504 and 7(a) loan programs
  • “SBA has determined that financing lawful activities of a prurient sexual nature is not in the public interest. The SBA Lender must consider whether the nature and extent of the sexual component causes the business activity to be prurient.”
• Miller v. California (1973) — Obscene materials do not enjoy First Amendment protection
  • 5-to-4 decision
  • The court modified the test for obscenity established in Roth v. United States and Memoirs v. Massachusetts:
    • The basic guidelines for the trier of fact must be: (a) whether ‘the average person, applying contemporary community standards’ would find that the work, taken as a whole, appeals to the prurient interest… (b) whether the work depicts or describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law; and (c) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value.”
    • “The jury may measure the essentially factual issues of prurient appeal and patent offensiveness by the standard that prevails in the forum community, and need not employ a ‘national standard.'”
  • Obscene material is not protected by the First Amendment. A work meeting the test above for “obscene material” may be subject to state regulation.