Business & Real Estate Loans in the Adult Entertainment Industry

Business & Real Estate Loans in the Adult Entertainment Industry

Many banks and lenders have restrictions when it comes to certain industries. In this article, we outline some of the ways in which businesses may be affected by this, if they fall under any category in the adult entertainment industry.

What Types of Industries Could be Restricted?

A restricted industry is a general name for many industries that may not avail of an institution’s services.

In the adult entertainment industry, this could be anywhere from online sex toy shops, to an adult video producer’s line of work. Massage parlors and exotic dance clubs often fall under the restricted industries category.

There is a long history of adult performers having their personal bank accounts shut down without forewarning. It is not limited to smaller lending business, either. The most common cases happened with major financial institutions: JPMorgan Chase, Bank of America, and American Express.

In the eyes of the above-mentioned banks, the adult business cannot obtain the same loans and financial support as other businesses.

For the new adult business owner, this could be a surprise. Getting a loan for a startup fund may be difficult. Even processing payments may have to be handled differently. Paypal is a big name that still prohibits adult industry transactions.

How to Know if You Will Be Able to Request a Loan

It can be difficult to determine from a lending firm or bank. Look for specifications regarding “morality clauses”. These are often a wide range of industries that are still considered taboo. The adult industry is not the only one; other businesses that may be restricted are marijuana companies and weapon sellers.

Those who have ever experienced difficulty getting a loan because of their work in the adult industry should not lose hope. This is simply an obstacle to be overcome.

Anyone who goes into this business and must make financial transactions should acknowledge two facts:

1. Many lenders and banks have moral objections in regards to the adult industry

2. Many folks who work in the adult industry have made financial decisions that put negative implications on everyone else in the business

That being said, there are still ways to get a mortgage for an adult industry business, complete with good rates.

Evidence and Documentation

One of the most important aspects is being in a good financial position. Those who apply for loans must have existing assets. This means being able to prove to the lenders that they have funds to support or pay back a loan.

Documentation should always be prepared. Supporting documents which can prove regular income from an industry, plus proof of larger deposits can usually secure a good business loan.

To secure a loan with an excellent interest rate, a mortgage expert must be consulted.

How to Prove Income in the Adult Entertainment Industry

There are many regulations for nationwide and international banks, put there to minimize illegal discrimination. Legally, no financial institution has the right to deny anyone a loan based on race or color. Same goes for health or disability issues, gender, and religion.

Yet since those regulations do not specifically prohibit adult-industry based discrimination, many in this industry are often wrongly categorized and denied the loans. Unfortunately, it is the small businesses and startups that are most hurt by the policies.

It is, however, a reality that many customers in the adult industry demand refunds, such as in the case where a credit card is used, and the one responsible denies any association with the adult purchase in question. This leads to many financial institutions denying accounts to anyone in the adult industry.

JPMorgan Chase once refused to underwrite a loan, simply stating “moral reasons”. When the client tried to refinance an existing loan, the bank stalled for months, without reason.

Using professional names for bank accounts

One thing we often see with those in the adult entertainment industry is that most of the financial issues are tied to business accounts—not personal ones. This happens in the case where a client uses their industry name or pseudonym when opening a bank account or applying for a loan.

This backfires, however, because it is often times that very pseudonym that is more known in the adult world. And of course, there is the occasional online research a suspicious lender can always do when making background checks.

Finding Real Estate and Business Loans for Your Needs

While preventing serious illegal activities or money laundering is a real concern, adult businesses should not be censored just because someone in the firm has a “moral” concern.

We have even been seeing that this kind of censorship does not prevent folks from doing business. They will simply find a way around it. Bitcoin and other cloud payment options are now becoming more popular, because of this very reason.


November 18, 2018 / by / in

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