SBA Shuttered Venue Operators (SVO) Grant Program: Guide To Eligibility Requirements & Application
The COVID-19 pandemic has reduced the sales of businesses ranging from accommodation to oil drilling, but few have been ground to a complete halt the way that indoor entertainment venues have. Let’s face it; if you’re worried about airborne disease transmission, there aren’t too many places less ideal to be than in close quarters with a large number of other people for hours at a time.
Nevertheless, these venues make up an important part of their community’s social and recreational scenes, and their loss would no doubt be felt should they close permanently. To help these shuttered venues stay in business long enough to return once the pandemic is over, Congress has approved a new grant program specifically targeted at businesses that host entertainment, both live and recorded.
The first thing you need to know about the SBA’s new Shuttered Venue Operator Grant program is that applications will open on April 8th, 2021. Read on to see what else you need to know about the new Shuttered Venue Grants.
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What Is The SBA Shuttered Venue Operators (SVO) Grant Program?
The new SBA Shuttered Venue Operator Grant program passed in the December 21, 2020, stimulus bill, adding it to the mix of business-relief programs designed to address economic losses due to the coronavirus pandemic. The bill sets aside $15 billion for the program, which, again, opens on April 8th, 2021.
Qualifying venues can get up to $10 million in grant money through the program, an amount that completely eclipses the $10,000 maximum available through EIDL grants. And unlike PPP, this isn’t a loan that is forgivable under specific circumstances. It’s a grant. In other words, “free money.”
The grants are broken down into two waves: an initial grant and a supplemental grant. The maximum amount of the initial grant is equal to 45% of the venue’s 2019 gross revenue, capping out at $10 million. A supplemental grant, equal to 50% of the amount received through the initial grant, will be available to some venues. Note that supplemental grants will not be available until all initial grants submitted within the first 60 days of the program are processed.
You can use the money you receive from a Shuttered Venue Grant for a number of different purposes, including:
- PPE, barriers, and other COVID protection measures
- Debt payments on debts from prior to February 15, 2020
- Payments to independent contractors (not to exceed $100K in annual compensation per contractor)
- State and local taxes and fees
- Administrative costs, including fees and licensing
- Operating leases in effect as of February 15, 2020
- Necessary insurance payments
- Capital expenditures for shows (this may not be the primary use of the funds, however)
You Can’t Get An SVO Grant & A Round 2 PPP Loan
Here’s the bad news. If you’re thinking of getting a Shuttered Venue Grant, you need to be aware that you can no longer combine it with a PPP loan. However, this only applies to PPP loans received on or after December 27, 2020. Meaning that if you received a PPP loan on or after December 27, 2020, whether it was your first draw or second draw, you are not eligible for a Shuttered Venue Operators Grant. If you received a PPP loan before December 27, 2020, you can still qualify for the Shuttered Venue Operators Grant program.
Shuttered Venue Operators Grant Eligibility Requirements
So who qualifies for the Shuttered Venue Operators Grant program?
- Live Venue/Performing Arts Operators & Promoters, & Theatrical Producers: This means it’s your principal activity, wherein a cover charge is used to pay performers a percentage of proceeds. At least 70% of your revenue had to come from ticket sales, refreshments, merchandise, qualified fees, or educational initiatives.
- Motion Picture Theater Operators: In other words, you show movies for a fee. You have to have at least one auditorium with a movie screen and fixed seating and at least one projector. You also have to market movies in any media.
- Museum Operators: You operate a public, tribal, or private nonprofit institution for an approved purpose (heritage, aesthetics, educational). The museum needs to be the main business activity. It needs to have an indoor exhibition space and at least one auditorium or performance space with fixed seating and regular events. Zoos and aquariums can qualify.
- Talent Agents: 70% of your job must be representing artists who perform live, and those performers must be paid based on ticket sales at live venues.
Additionally, you must:
- Have been fully operational by February 29, 2020
- Had a loss of at least 25% in revenue in at least one 2020 quarter relative to the same quarter in 2019
- Have reopened or plan to reopen or to resume representation if you’re an agent
You will be ineligible if:
- Your business is a publicly-traded company
- You got 10% or more of your 2019 revenue from federal funding
- If two or more of the following are true:
- You own or operate in more than one country
- You own or operate in more than 10 states
- You have more than 500 employees as of February 29, 2020
- Your live performances are mainly of a sexual nature
- You’ve received a PPP loan after December 27, 2020 (see above)
How To Apply For A Shuttered Venue Grant
The SBA is administering the grants directly, so you’ll apply through the SBA’s portal. SVO Grant applications will open on April 8th, 2021, so keep an eye on the SBA’s website and be ready to apply if you’re eligible.
During the first 60 days that the SVO Grant program is open, $2 billion will be set aside specifically for venues with 50 employees or less. Larger venues with more than 50 employees can still apply for a grant during this period provided they meet the other requirements for being priority awardees as described below.
During the first 14 days of the program’s opening, applicants that experienced a 90% or greater loss of revenue between April 1, 2020, and December 31, 2020, compared to the same 2019 period, will be eligible. This will be known as the First Priority group.
During the next 14-day window, the threshold lowers to 70% or greater. This will be the Second Priority group.
Twenty-eight days after the SVO Grant program’s opening, the threshold lowers to 25% or greater. Additionally, supplemental funding will be available to First and Second Priority grant recipients that suffered a 70% or greater revenue loss for the most recent calendar quarter (as of April 1, 2021, or later).
Beginning sixty-one days after the start of the initial grant awards, the $2 billion set-aside for smaller venues no longer applies, and all venues that have suffered a revenue loss of 25% or greater will have an equal shot at receiving an SVO Grant. Note that money received through a CARES program between April 1, 2020, and December 31, 2020, does not count toward your revenue for that year.
More Funding Resources For COVID Relief
Don’t think you qualify for an SVO grant or want to compare it to the second round of PPP and EIDL grants and loans? Merchant Maverick is your one-stop-shop for information about small business coronavirus relief.
- Economic Injury Disaster (EIDL) VS Paycheck Protection Program (PPP) Loans: What’s The Difference?
- PPP Round 2: Main Differences Between The First & Second Round Of PPP Funding
- PPP Round 2: How To Apply For A First Or Second Draw PPP Loan