The process for accessing the federal COVID-19 relief that was passed into law last December has undergone many changes in the past few weeks and TCG is sharing the following important and time-sensitive updates. In 2021, new opportunities are available to access a 2021 Paycheck Protection Program (PPP) forgivable loan or to seek a Shuttered Venue Operators Grant (SVOG) and, under current rules, applicants may choose to apply for only one of the two programs. These rules may be changing as Congress considers the current relief package in the coming days. Whether your theatre has already applied for a PPP loan or has been awaiting the launch of the Shuttered Venue Program, please review the important updates below.
- Possible Dual Eligibility for PPP and SVOG: The Senate has added a provision to the American Rescue Plan – the latest relief package making its way through Congress - that would allow 2021 PPP recipients to apply for SVOG, and then deduct the value of their PPP loan from the applicant’s SVOG maximum grant amount (45% of earned revenue in 2019 with a cap of $10 million). The certainty of this option being available cannot be confirmed until the newest relief act is signed into law. Congress and the White House are aiming to complete the relief bill before March 15.
- PPP Re-Opens to All Applicants Next Week: As a reminder, the White House and Small Business Administration (SBA) announced that starting on Wednesday, February 24, a 14-day period began during which Paycheck Protection Program applications will only be accepted from applicants with fewer than 20 employees, and sole proprietors. The period ends on March 9, 2021, at 5:00pm Eastern, at which point lenders will resume processing for all applicants. Those that qualify for PPP but have not yet applied will want to keep in mind that the 2021 PPP program closes on March 31.
- Timing Uncertain for SVOG Launch: While the exact timing for opening the Shuttered Venues Operators Grants (SVOG) program is uncertain, it is possible that the program may not launch until after March 31. It is the intention of SBA to continue to build out the guidance, application, and training materials, provide a span of time for applicants to prepare, and then open the portal.
- Availability of Funds: As of February 28, the SBA PPP Data shows that roughly half of PPP funding made available for 2021 has been distributed to loan applicants. As the Shuttered Venues program has not yet launched, it is difficult to predict how quickly the $15 billion in available funding will be depleted.
- SVOG Eligibility Details: As TCG has previously shared, the SVOG Frequently Asked Questions issued by the SBA earlier this week indicate that eligibility for the 28-day priority periods for SVOG will be determined based on declines in gross revenue (90% for the first 14 days and 70% for the second 14 days), from April 1, 2020 through December 31, 2020 as compared to 2019. All SVOG applicants must demonstrate a 25% decline in earned revenue, in one calendar quarter of 2020, compared to the same quarter in 2019. The SBA will encourage all applicants to submit their applications to the portal at the very start of the program launching, as applications will be processed in the order in which they are received, within the priority period and following its conclusion.
- SBA has published Eligibility requirements and a Preliminary application checklist:
- PPP Formula Changes Specifically to Help Self-Employed Workers: The Biden Administration also announced four additional changes to prioritize the Paycheck Protection Program (PPP) to support as many underserved small businesses and self-employed workers as possible, effective 3-3-21. The first change detailed below is the real game-changer and only applies to self-employed individuals (sole proprietors, gig workers and 1099s) who have not been approved for a new (1st or 2nd draw) PPP loan yet in 2021.
SBA will now allow eligible self-employed individuals (sole proprietors, gig workers, 1099s) to qualify for a larger PPP loan by revising the “payroll expenses” formula for these applicants only. Self-Employed applicants can now qualify by using their “Gross Income” on Line 7 of their Schedule C for either 2019 or 2020. This new PPP formula is more equitable to self-employed individuals and it will yield significantly more forgivable loan funds than ever before! SBA released late yesterday afternoon two new forms:
This is good news for those self-employed individuals who have not applied yet for a new PPP.
TCG will keep you informed of all additional information as we have. Further background is available in TCG’s Federal Relief page.