SBA Provides Guidance on Financial Aid to Shuttered Venue Operators
Entertainment venues and cultural institutions have been suffering for nearly a year since states and cities began imposing lockdowns and other restrictions due to the pandemic. However, a new federal program will provide a desperately needed lifeline to these organizations.
The Small Business Administration (SBA) has released a set of frequently asked questions on how the new program to provide aid to clobbered playhouses, movie theaters, museums and other venues will work.
The $15 billion Shuttered Venue Operators Grant (SVOG) program was created by The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act from the COVID-19 relief bill that was signed into law in late December.
A starting date for the SVOG program has not been announced, but it will provide eligible applicants with grants equal to 45% of their gross earned revenue for 2019, up to a maximum of $10 million.
Entities eligible for a SVOG include:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Motion picture theater operators
- Museum operators
- Talent representatives
All eligible entities must have been in operation on February 29, 2020 and had a 25 percent or greater drop in gross earned revenue during any quarter of 2020 as compared to the same quarter of 2019.
All types of entities are eligible for this relief, including for-profit, nonprofit, government-owned, corporations, limited liability companies, partnerships, and sole proprietorships.
The Act includes relief eligibility for entities owned by a state or a political subdivision of a state; however, the relief is only available solely to venue operators and not any other entities of a state or political subdivision that are not venue operators. 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 applicants must meet the following eligibility requirements:
- 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 SVO grant 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 means that mobile entities such as a circus, fair, or business that provides talent for events such as weddings are not eligible for a SVOG.
A venue operator is not eligible for an SVOG if any of the following apply.
- 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.
What can an entity do to get ready to apply?
In the SVOG FAQs, it says that as the SBA is building the application platform, it would best to:
- Register for a DUNS number so you can then register in the System for Award Management (SAM.gov)
- Gather documents that demonstrate your number of employees and monthly revenues so you can calculate the average number of qualifying employees you had over the prior 12 months
- Determine the extent of gross earned revenue loss you experienced between 2019 and 2020. This and additional information such as floor plans, contract copies and other evidence will be needed to apply for an SVOG.
Currently, the SBA is working expeditiously to open the program’s application window and that potential applications should frequently visit www.sba.gov/coronavirusrelief for updates.
RINA will also keep you updated as the program rolls out. Feel free to reach out to your RINA professional with any questions.