SBA Grant Program For Shuttered Venue Operators: 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.
Here’s what you need to know about the new shuttered venue grants.
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What Is The SBA Shuttered Venue Grant Program?
The SBA shuttered venue operator grant program is a new program, passed in the December 21, 2020, stimulus bill, that’s been added 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.
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
- State and local taxes
- Licensing costs
- Necessary insurance payments
- Capital expenditures for shows
You Can’t Get A Shuttered Venue Grant & A 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’t, as of this moment, combine it with a PPP loan. However, this only applies to PPP loans received after December 27, 2020. If you received a PPP loan before this date, you can still qualify for a shuttered venue grant.
The restriction covers both first and second draw PPP loans.
Shuttered Venue Operator Grant Eligibility Requirements
So who qualifies for the shuttered venues operators 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.
- 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. As of this time, the SBA is not yet processing shuttered venue operator grant applications, so you’ll want to keep an eye on the SBA’s site for when the program opens or check back with us soon.
Some additional restrictions will apply once the program starts.
During the first 14-days, only applicants who 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.
During the next 14-days, the threshold will be lowered to 70% or greater.
After that, the program will be open to all qualifying candidates. 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 a shuttered venue grant or want to compare it to round 2 of PPP and EIDL grants and loans? Merchant Maverick is your one-stop-shop for information about small business coronavirus relief.
- EIDL VS PPP Loans: What’s The Difference
- PPP Round 2: Main Differences Between The First & Second Round Of PPP Funding
- How To Apply For A Paycheck Protection (PPP) Loan For Coronavirus Relief