If your organization is a live venue, performing arts organization, cultural institution, theatre, or make your living as a live venue promoter or talent representative, you may be eligible for an upcoming federal Shuttered Venue Operator Grant.
The Small Business Administration will allocate and distribute $15 billion through the Shuttered Venue Operator Grant (SVOG) program to eligible persons and entities who experienced at least a 25% drop in revenue. Up to $10 million may be granted to an entity. You do not need to repay these federal grants.
The SBA hosted a webinar on January 14, 2021, which we are sharing here.
Who can be considered for SVOG grant?
Applicants must meet specific criteria, including staffing levels, attendance, venue specifications, and revenue. They must also fall into at least one of six established categories.
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Relevant museum operators, zoos and aquariums who meet specific criteria
- Motion picture theater operators
- Talent representatives, and
- Each business entity owned by an eligible entity that also meets the eligibility requirements
- Entities must have been “fully operational” on February 29, 2020;
- The “gross earned revenue” during a calendar quarter in 2020 must have been reduced by at least 25% from the same quarter in 2019;
- The entity must have resumed or intends to resume its respective operations.
Who is not eligible?
There are also restrictions and activities which can make an organization ineligible for consideration.
Ineligible entities include recipients of a PPP loan after December 27, 2020, organizations considered “large operators,” and entities for whom more than 10% of their gross revenue is from federal funding.
For more details on eligibility, please refer to the following guide: https://www.pillsburylaw.com/en/news-and-insights/covid-19-relief-act-grants-venue-operators.html.
How much are the grants?
Grantees may receive a grant of up to $10 million or 45% of the grantee’s gross earned revenue in 2019, whichever is less.
If a single entity operates multiple venues, the grant would be shared across all venues and not exceed $10 million total.
Supplemental grants may be considered, with restrictions, but are not expected to exceed 50% of the initial grant, with the total not to exceed $10 million per entity.
How will grants be distributed?
The grants will roll out with a tiered priority system initially.
- First-Priority Grants: In the first 14 days, grants will be available to entities that have experienced at least a 90% reduction in revenue between April 1 and December 30, 2020, as compared to the same period in 2019.
- Second-Priority Grants: In the second 14 day period, grants will be awarded to entities that have experienced at least a 70% reduction in revenue.
- General: After 28 days, grants are open to all eligible entities. (At least 20% of the grant funds are being held to ensure there are funds remaining for this group.)
There are appropriated funds for the first 60 days of the program for grants to eligible persons or entities with 50 or fewer full-time employees.
How can the funds be used?
These funds are to be used for costs incurred between March 1, 2020, and December 31, 2021. Any funds from the initial grants that aren’t expended within a year of disbursement must be returned to the SBA. (These dates may be extended if supplemental funds are granted.)
Allowable expenses include expected business operating expenses incurred before February 15, 2020. They include:
- Payroll costs
- Rent, utilities, mortgage principal and interest
- Worker protection expenses
- Payments to independent contractors up to $100,000
- Other ordinary and necessary business expenses (maintenance, administrative expenses, state and local taxes, insurance premiums)
The grant funds can also be used for the following expenses, but they may not be the primary use for the funds.
- Advertising, production, or transportation
- Capital expenses related to the production of a live performance or exhibition
Like other SBA loans, there are restrictions. Recipients may not use funds to purchase real estate, pay interest on loans originated after February 15, 2020, lend or invest, make political contributions, or other use prohibited by the program administrator.
The SBA will have an oversight and audit plan for this program. Grantees will have to document compliance with the grant rules following the receipt of the grant, including SBA audits and reviews, until the compliance period is completed.
How to Apply
It’s expected that the process will be similar to the existing economic disaster injury loan process, but the details have yet to be released.
Meanwhile, SBA’s disaster assistance customer service center can be reached at 1-800-659-2955 or by e-mail at SVOGrant@sba.gov; please include the topic in your subject line.
Information from the following sources was used for this summary:
- SBA Shuttered Venue Operators Grant program webinar January 14, 2021
- SBA Coronavirus (COVID-19): Small Business Guidance & Loan Resources
- National Law Review article: Front and Center: New SBA Grant Program for Shuttered Venue Operators
- Pillsbury Law: COVID-19 Relief Act Provides Grants for Shuttered Venue Operators Hard-Hit by the Pandemic
- Warren Averett: Frequently Asked Questions about Shuttered Venue Grants Answered
- Association of Science and Technology Centers: New COVID relief grants program for shuttered venues includes museums
- U.S. Chamber of Commerce: Guide to Small Business COVID-19 Emergency Loans