Colorado SBDC Disaster Relief Efforts Supported By:
Shuttered Venues Operator Grant (SVO)
The Shuttered Venue Operators (SVO) Grant program was established by The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues, to be administered by the Small Business Administration’s Office of Disaster Assistance.
Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.
Who can apply
Eligible entities include:
- 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
Other requirements of note:
- Must have been in operation as of Feb. 29, 2020
- Venue or promoter must not have received a PPP loan on or after Dec. 27, 2020
Amount of SVO Grant
Awards will be either for:
- An eligible entity that was in operation on Jan. 1, 2019, the lesser of an amount equal to 45% of their 2019 gross earned revenue OR $10 Million.
- An eligible entity that began operation after Jan. 1, 2019, the lesser of the average monthly gross revenue for each full month you were in operation during 2019 multiplied by 6 OR $10 Million.
How to apply
The SBA is in the process of setting up the grant program and is not yet accepting applications. Small businesses who have suffered the greatest economic loss will be the first applications processed under the following schedule:
Open only to small entities with up to 50 employees:
1st 14 days of grant awards
Entities that suffered a 90% or greater revenue loss between April 2020 through December 2020 due to the COVID-19 pandemic.
Next 14 days of grant awards
Entities that suffered a 70% or greater revenue loss between April 2020 through December 2020 due to the COVID-19 pandemic.
Beginning 28 days after First & Second Priority Awards are made
Entities that suffered a 25% or greater revenue loss between April 2020 through December 2020 due to the COVID-19 pandemic.
Available after First & Second Priority
Recipients of First and Second Priority round who suffered a 70% or greater revenue loss for the most recent calendar quarter (as of 04-01-21 or later)
Unrestricted; open to entities of any size:
Unrestricted, non-priority round
Begins 61 days after initial grant awards
Eligible entities of any size that suffered a 25% or greater revenue loss
Allowable use of funds
Funds may be used for specific expenses, which include:
- Payroll costs
- Rent payments
- Utility payments
- Scheduled mortgage payments (not including prepayment of principal)
- Scheduled debt payments (not including prepayment of principal) on any indebtedness incurred in the ordinary course of business prior to 02-15-20)
- Worker protection expenditures
- Payments to independent contractors (not to exceed $100K in annual compensation per contractor)
- Other ordinary and necessary business expenses, including maintenance costs
- Administrative costs (incl. fees and licensing)
- State and local taxes and fees
- Operating leases in effect as of 02-15-20
- Insurance payments
- Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production. (May not be primary use of funds.)
Grantees may not use award funds to:
- Buy real estate
- Make payments on loans originated after 02-15-20
- Make investments or loans
- Make contributions or other payments to, or on behalf of, political parties, political committees, or candidates for election
- Any other use prohibited by the Administrator
Grantees will be required to maintain documentation demonstrating their compliance with the eligibility and other requirements of the SVO Grant program. They must retain employment records for four years following their receipt of a grant and retain all other records for three years.
Application and additional guidelines will be posted when available.
SBA issues FAQs for Shuttered Venue Operators Grants
By Jeff Drew
A set of frequently asked questions released by the U.S. Small Business Administration does not specify a starting date for the new Shuttered Venue Operators Grant (SVOG) program but does recommend actions potential applications should be taking while the SBA builds the application platform.
The $15 billion SVOG was created by The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260, the COVID-19 relief bill that was signed into law in late December and also revived the Paycheck Protection Program (PPP).
The revived PPP, also administered by the SBA, began accepting applications on Jan. 11 but no starting date has been announced for the Shuttered Venue program, which will provide eligible applicants with grants equal to 45% of their gross earned revenue, up to a maximum of $10 million.
What venue operators should be doing now
In the Shuttered Venue FAQs, published Jan. 29, SBA says that is “working expeditiously” to open the program’s application window and that potential applications should frequently visit www.sba.gov/coronavirusrelief for updates. In the meantime, SBA said, potential SVOG applicants should be taking steps to prepare while the SBA works to build the application platform for the program.
Specifically, entities are encouraged to obtain a Dun & Bradstreet (DUNS) number so they can then register in the System for Award Management (SAM.gov). Other identifiers, such as an Individual Taxpayer Identification Number or Employer Identification Number, cannot be used.
Entities that have or receive a DUNS number should immediately begin registering in SAM.gov as the SAM registration may take up to two weeks after submission.
In addition, the SBA recommends that potential applicants gather documentation showing their employee count and monthly revenue so that they can calculate the average number of qualifying employees the entity has had over the prior 12 months. The FAQs provide guidance on how to determine employee count on page 6.
SVOG applicants also will need to determine and document the extent of gross earned revenue loss experienced in 2020 compared to 2019. The FAQs provide details on how to calculate revenue on pages 6-7. Other required information includes floor plans, contract copies, and other evidence.
Entities eligible for an SVOG, per the Economic Aid Act, may be live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theater operators, and talent representatives. The FAQs add that entities of those types owned by state or local governments are eligible to apply if the governmentally owned entity acts solely as a venue operator, such as for a museum or historic home, and does not also run other types of entities. For example, a city parks and recreation department that operates a bandstand in a public square but also runs several nature parks would be ineligible to apply for an SVOG.
In addition, SVOG grant applicants must meet the following eligibility requirements.
- Must have been in operation on Feb 29, 2020.
- Must not have an application pending for a PPP loan. If the entity has applied for either a first- or second-draw PPP loan on or after Dec. 27, 2020, they are ineligible to apply for an SVOG until their PPP loan application is denied. Entities may not apply for a PPP loan and an SVOG at the same time. However, an entity that applied for and received a PPP loan during the first iteration of PPP last year is eligible to apply for an SVOG.
- Must have defined performance and audience spaces with fixed seating (which is defined as seating permanently fixed to the floor or ground.) The Economic Aid Act does not allow for temporary, removable, modular, convertible, or other non-fixed seating arrangements. This means that mobile entities such as a circus, fair, or business that provides talent for events such as weddings are not eligible for a Shuttered Venue grant if they do not meet the performance space and fixed seating requirements.
- Outdoor venues can apply for an SVOG if they are otherwise eligible under the rules for their type of entity. For example, a drive-in movie theater without fixed seating does not meet the requirement that a motion picture theater operator must have at least one auditorium with a motion picture screen and fixed audience seating.
A venue operator is not eligible for an SVOG if any of the following apply.
- It received a PPP loan on or after Dec. 27, 2020.
- It is a publicly traded corporation, or is majority owned and controlled by a publicly traded corporation.
- It presents live performances or sells products or services of a prurient sexual nature.
- More than 10% of its 2019 gross revenue came from the federal government (not counting disaster assistance).
- It owns or operates venues, theaters, museums, or talent agencies in more than one country; owns or operates venues, theaters, museums, or talent agencies in more than 10 states; AND it had more than 500 employees as of Feb. 29, 2020.
Additional, more specific questions about entity eligibility are covered on pages 3 and 4 of the FAQs.
SBDC is here to help you, whether you need help deciding if additional funding is right for your business, help applying, or general business consulting. Sign up for free, one-on-one confidential consulting today.