The Shuttered Venue Operators Grant (SVOG), originally established through the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act and amended by the American Rescue Plan Act, is set to begin accepting applications on April 8th. The SBA launched a splash page for the new portal where businesses can sign up to be notified once the application opens.
The Shuttered Venue Operators Grant provides over $16 billion in economic relief to target industries negatively impacted by the COVID-19 pandemic.
Here’s an overview of the program.
Entities eligible for the Shuttered Venue Operators Grant include:
- Live venue operators or promoters
- Live performing arts organization operators
- Theatrical producers
- Motion picture theater operators
- Relevant museum operators, aquariums, and zoos who meet specific criteria
- Talent representatives
- Each business entity owned by an eligible entity that also meets the eligibility requirements
Entities must have been in operation as of February 29th, 2020, to be eligible for the SVOG.
For entities in operation January 1st, 2019, the maximum grant an entity can receive is equal to 45% of their gross earned revenue or $10 million, whichever is less. Entities that began operating after January 1st, 2019, can receive grants equal to their average monthly gross earned revenue for each full month they were in operation during 2019 multiplied by six, or $10 million, whichever is less.
If an entity received a PPP loan on or after December 27th, 2020, their SVOG will be reduced by the amount of the PPP loan.
SVO grants can be used to cover certain expenses, including:
- Payroll costs
- Rent and utility payments
- Scheduled mortgage payments (not including prepayment of principal)
- Worker protection expenses
- Scheduled debt payments (not including prepayment of principal on any indebtedness incurred in the ordinary course of business before February 15th, 2020)
- Administrative costs (including fees and licensing)
- Payments to independent contractors (not to exceed $100,000 in annual compensation per contractor)
- State and local taxes and fees
- Insurance payments
- Operating leases in effect as of February 15th, 2020
- Other ordinary and necessary business expenses, including maintenance costs
- Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production (this may not be the primary use of the funds)
Businesses that receive a PPP loan after December 27th, 2021, are no longer ineligible for an SVO grant under certain conditions. If a borrower receives a first or second draw PPP loan after December 27th, 2020, the amount of a subsequently approved SVO grant will be reduced by the amount of the first or second draw PPP loan.
If a PPP loan applicant is approved for an SVO grant before they receive a PPP loan number, the applicant becomes ineligible for the PPP loan.
Applying for the SVOG
The SBA will be prioritizing grants for entities that suffered the greatest economic loss in the following order:
First priority: Entities that experienced a 90% or greater revenue loss between April 2020 to December 2020 will have their applications processed within the first 14 days of grant awards.
Second priority: Entities that experienced a 70% or greater revenue loss between April 2020 to December 2020 will have their applications processed in the next 14 days of grant awards.
Third priority: Entities that experienced a 25% or greater earned revenue loss between one quarter of 2019 and the corresponding quarter of 2020 will have their applications processed beginning 28 days after 1st and 2nd priority awards are made.
Supplemental funding: Available after all priority periods have passed to recipients of 1st, 2nd, and 3rd priority round awards who suffered a 20% or greater revenue loss for the most recent calendar quarter (as of April 1st, 2021, or later).
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Author: Megan O’Donnell