Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Businessman Goes After the Pink Pound




LONDON -- Gays and lesbians have achieved equality in fashion, music and entertainment but still face discrimination in the world of finance, says millionaire entrepreneur Jim McKay.


But the 41-year-old Scot plans to change that by launching an Internet service for businesses catering to homosexuals.


"We are going to legitimize gay business," he said during an interview in the private cigar room of one of his two London nightspots, the labyrinthine, multistory Voodoo Lounge.


Despite the much-hyped "pink pound" - the notion that gays and lesbians have high disposable incomes and a propensity to spend - he says gay business has never been taken seriously in the financial markets.


"What I'm trying to do is make the banks aware that you can actually be involved with these companies and be safe," said McKay, who worked as a fisherman, roofing contractor and oil rig worker before coming to London in 1990.


The Voodoo Lounge and McKay's other restaurant-bar, the Edge, have a combined annual turnover of just under pounds 6 million ($9.4 million). He employs 110 people and among his various investments plans to put about pounds 100 million into four hotels.


Acquisitions relating to his web site, temporarily named theclan.com, will total about pounds 30 million, he said.


Despite his assets, he said he and other gay business entrepreneurs face abnormally tough lending requirements.


"The owner of a straight bar can borrow at least 10 times net profit from a corporate bank. A gay bar can get only four times, even if it has higher turnover," he said.


At least one high street bank has told him explicitly that it did not wish to finance him because he was at high risk of dying of AIDS, he said.


Landlords also pose problems, with property companies typically asking for a year's rent in advance for a gay business when three months is the norm, and at least double the normal deposit. A reference from the royal family for roofing work at Balmoral castle helped him get his first London commercial lease.


His idea for the web site was sparked when young entrepreneurs launching gay businesses started coming to him for advice after facing slammed doors at financial institutions.


McKay singled out National Westminster Bank as especially homophobic, though he emphasized that the problem was only on the corporate banking side - he does his personal banking with NatWest - and that younger bank managers were more accepting than older ones.


A spokesman for NatWest said the bank strongly rejected any accusations of homophobia.


"If any customer feels that they have been unfairly treated by us, we would urge them to contact us to discuss their concerns," the spokesman said.


McKay said he has had positive reaction on funding theclan.com from Internet incubator funds Oxygen Holdings PLC and Legendary Investments PLC.


Asked if his company had any qualms about investing in a company with gay web portals, a spokesman for an online music provider said: "Oh God, no. Not nowadays."