Shuttered Venue Operators Grant: What it means

The Economic Aid to struggling small businesses, non-profit entities, and venues Act, which was a component of the Consolidated Appropriations Act, 2021, signed into law on Dec. 27, 2020, established the $16.25 billion Shuttered Venue Operators Grant (SVOG) program.

The Small Business Administration (SBA) is in charge of  the program administration 

The American Rescue Plan Act changed the SVOG to provide funds equal to 45 percent of a qualified venue's gross generated revenue, with a maximum grant payout of $10 million.

A reserve amount of $2 billion was available to eligible applicants with up to 50 full-time employees. The SVOG program began accepting applications on April 26, 2021, after various delays.

The SVOG program got off to a poor start, with only 50 grants given by June 3, 2021, reflecting less than 1% of the 10,262 requests received.

However, as of Feb. 14, 2022, $14.12 billion had been awarded in Shuttered Venue Operators Grants, with $14.06 billion disbursed to recipients.

SVOG Eligibility

To be recognized for an SVOG during the open application procedure, the candidate had to represent one of the following types of venues, as stipulated by the Economic Aid Act:

• Live venue operator or promoter.

• Talent representative.

• Live performing arts organization operator.

• Museum operator.

• Motion picture theater operator.

• Any subsidiary of an eligible entity that also meets eligibility requirements.

• Theatrical producer.

• Any of the above is operated by a state or local government solely as a venue.

Entities that are Ineligible 

Even if the venue meets all other criteria, it will not be considered for a grant if any of the following conditions are involved:

• As of February 29, 2020, it was not in use.

• SVOG awards have already been given to five other firms with whom it is linked.

• The federal government accounted for more than 10% of its total revenue in 2019, not counting disaster assistance.

• It hosts live performances or sells obscenely sexually explicit goods and services.

• It is a museum, and it has already received $10 million in SVOG funding from other museums with which it is linked.

• It has no physical presence in the United States, does not operate primarily in the United States, and does not contribute significantly to the American economy through taxation or the use of American products, resources, or labor.

• It is a publicly-traded corporation or a publicly traded corporation that owns and controls the majority of it.

• It possesses or runs venues, theaters, museums, or talent agencies in more than one country; it owns or manages venues, theaters, museums, or talent agencies in more than ten states; and, as of Feb. 29, 2020, it employed more than 500 people.

Process of Application

Applicants were required to gather documentation, register for a Data Universal Numbering System (DUNS) number, and register in the System for Award Management before being considered.

The SBA Shuttered Venue Operators Grant Applicant User Guide contains instructions for the application procedure.

Applicants were directed to the Main Shuttered Venue Operators Grant Page to apply once they had registered.

To evaluate eligibility, applicants provided floor plans, contract copies, and other material requested in the SVOG Preliminary Application Checklist, in addition to gross revenue loss from 2019 to 2020.

Applicants were required to submit their applications at the conclusion of the application procedure. They were notified of the progress and revisions through email once it was completed.

Applicants had to show how many qualified staff they had on average during the previous 12 months.

Grant Awards Priority Periods

Based on the percent of economic loss sustained by the shuttered venue, the SVOG program created priority periods for the distribution of grant awards.

The SBA accepted applications on a first-in, first-out basis during each priority period. Beginning in May of 2021, awards were given out.

The first 14 days were dedicated to businesses that lost 90% or more of their revenue owing to the COVID-19 epidemic between April and December 2020.

Entities that lost 70% or more of their revenue between April and December 2020 were included in the second 14 days, which were days 15–28.

Entities that lost 25% or more of their revenue during one quarter of 2019 and the same quarter of 2020 were included in the final period.

Supplemental grants were provided at that time to qualifying beneficiaries of first, second, and third-round awards who had experienced a revenue loss of 70% or more in the previous calendar quarter.

Following a decision, there are several options

After obtaining a verdict on their grant application, applicants have three options: appeal, amount reconsideration, or supplemental award.

Appeal

Applicants receive an email and an update in the SVOG portal if their application is denied, indicating that they are eligible to file an appeal.

The initial appeal window is two weeks long, during which time funding is guaranteed.

After the initial two-week deadline closes, there is no certainty that funds will be available for applicants who file an appeal.

Reconsideration of the Award Amount

The grantee will get an email indicating eligibility to seek award amount reconsideration if the award is at least $100 less than the Adjusted Proposed Grant Amount on the first application.

There is a two-week window for this process as well. Because award amount reconsideration may change the amount of the first award, this process must be completed before a Supplemental Award is evaluated.

Supplemental Award

If a grantee receives an initial SVOG, they will be required to update their generated revenue for 2021 in order to be deemed for a Supplemental Award.

Grantees should go into the portal and change the action item within two weeks to accomplish this.

Reconsideration 2.0

Grantees will be given one final opportunity to request Reconsideration of their Award Amount once Supplemental eligibility has been processed.

Grantees will be notified via email that a new Action Item has been added to their application portal, encouraging them to “Apply for Reconsideration of your SVOG Award Amount.”

This Action Item enables a grantee to correct any inaccuracies on their initial SVOG application that may have resulted in a lower predicted award amount.

What Can SVOG Funds Be Used For?

Only the specified purposes listed below may be used using SVOG money. Grantees must keep documentation indicating that they have followed these guidelines.

Additionally, grantees must keep employment records for four years after receiving funding and any other documents for three years.

• Utilities.

• Payroll.

• Rent.

• Taxes and fees imposed by the state and local governments.

• As of Feb. 15, 2020, operating leases.

• Payments from insurance.

• Advertising, transportation, and capital costs associated with putting on a theatrical or live performing arts event. It's possible that this isn't the primary purpose of the cash.

• Payments on a mortgage, not including prepayment of principal.

• Payments on debts, not including prepayment of principal on any indebtedness incurred in the ordinary course of business prior to Feb. 15, 2020.

• Expenses for worker safety.

• Independent contractor payments ($100,000 or less per year per contractor).

• Other necessary and routine business expenses, such as maintenance.

• Costs of administration, which include fees and licensing.

What Can't Be Done With SVOG Funds

Beneficiaries may not utilize SVOG funding for any of the following, as well as any other use forbidden by the Small Business Administration (SBA):

• Loans or investments.

• Contributions or other contributions made to, or on behalf of, political parties, political committees, or election candidates.

• Real estate acquisition.

• Payments due on loans taken out after February 15, 2020.

• Any other usage that the administrator forbids.