March 23, 2021
SBA Hot Topic Tuesday – SBA Prepares to Launch the Shuttered Venue Operator’s Grant Program
“The SBA has worked diligently to build the Shuttered Venue Operators Grant program from the ground up to assist and address the diverse eligibility requirements of each type of applicant and we will open for applications on April 8,” says the new SBA Administrator, Isabella Guzman. “The SBA knows these venues are critical to America’s economy and understands how hard they’ve been impacted, as they were among the first to shutter. This vital economic aid will provide a much-needed lifeline for live venues, museums, movie theatres, and many more.”
The Shuttered Venue Operators Grant (SVOG) program was established by the Economic Aid Act in December. However, the program experienced a delay in opening. As a result, the recently enacted American Rescue Plan added additional funding to the program, bringing the SVOG’s total grant capacity to just over $16 billion.
In anticipation of the program’s opening, the SBA has released a 23 page FAQ sheet on eligibility and use of funds. According to that FAQ sheet, the program will generally be available for live venue operators or promoters; theatrical producers; live performing arts organization operators; certain museum operators; zoos and aquariums who meet a specific criteria; motion picture theater operators; and talent representatives. However, the venue must have been in operation prior to February 29, 2020, and the funds must be used for payroll, rent or mortgage payments, and operational expenses.
Shuttered entities in operation on January 1, 2019, will be eligible to receive a grant in an amount equal to 45% of their 2019 gross earned revenue or $10 million, whichever is less. Entities that began operation after January 1, 2019, can receive a grant in an amount based on their average monthly gross earned revenue for each full month in operation multiplied by six or $10 million, whichever is less. Regardless of when the business opened, the SVOG applicant will have any PPP loan amount that they received deducted from their grant award.
To ensure that the grant is equitably distributed, the SBA will have a 14 day priority period in which they will only process applications for entities that suffered a 90% or greater revenue loss between April 2020 through December 2020. Immediately following that priority period, there will be a second 14 day priority period for businesses that suffered a 70% or greater revenue loss. Beginning 28 days after first and second priority awards are made, the SBA will open up the program to all entities that suffered a 25% or greater earned revenue loss between one quarter of 2019 and the corresponding quarter of 2020.
As the SBA works on building the application platform, it is recommended that entities interested in participating in the program review the SVOG Eligibility Requirements listed on the SBA’s website and register for a DUNS number. They should also begin to gather documents that demonstrate the number of employees they have, their monthly revenues, and their gross revenue loss between 2019 and 2020.