The Small Business Administration will implement a new $16.25 billion grant program to support for “shuttered venue operators” and is still in the process of finalizing the details of eligibility requirements.
The application process will open on April 8, 2021, and the SBA is posting preliminary information, subject to change in response to stakeholder feedback, on their Shuttered Venue Operators Grants (SVOG) web page. SBA will not write a rulemaking on the program, opting for less formal guidance for applicants.
While complete guidance on implementation of the program is not available, SBA will provide further web updates and video guides about the grants, who can apply, how potential organizations can prepare, and additional details regarding eligibility and applications.
- Confirm your SAM registration now! SBA will place a notice to initiate the application process on Grants.gov, and all applicants will be required to have a DUNS number and register with the System for Award Management (SAM), where your organization’s information must be renewed annually. Please remember that you can always go directly to sam.gov to renew your DUNS number directly and without cost.
- The Grants.gov Contact Center is available 24 hours a day, 7 days a week. (Phone: 1-800-518-4726. email: email@example.com)
- SAM.gov Federal Service Desk: Call 1-866-606-8220 or see the information posted on the SAM.gov website at SAM User Guides.
- District and regional SBA offices may be a resource for technical assistance throughout the application process, and some will be providing specialized stakeholder events.
- While detailed information is not yet available on required documentation, SBA recommends that applicants “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. Lastly, 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.”
- Previous rules that had required applicants to choose between seeking a 2021 PPP loan or a Shuttered Venue Operators Grant have changed. Under the new terms of the American Rescue Plan, 2021 PPP recipients will be eligible to apply for a Shuttered Venues Operators Grant (SVOG) and deduct the value of their 2021 PPP loan from the applicant’s SVOG maximum grant amount (45% of 2019 earned revenue, capped at $10 million.) Applicants that received a PPP forgivable loan in 2020 but are not applying for PPP in 2021 are eligible for the maximum grant amount. The SBA is updating guidance to reflect the changes made through the American Rescue Plan.
- Theatres can qualify to apply, even if they do not own their performance space. “Live performing arts organization operators” are specifically eligible and are defined as an individual or entity that “as a principal business activity, organizes, promotes, produces, manages, or hosts live concerts, comedy shows, theatrical productions, other events by performing artists.”
- Eligibility is offered to for-profit and nonprofit applicants, as well as independent motion picture theatre operators, museum operators, and talent representatives.
- Applicants must demonstrate a minimum 25% decline in gross earned revenue in one calendar quarter of 2020, compared to the same quarter in 2019, to qualify to apply.
- Applicants will calculate their grant amount based on 45% of an entity’s gross earned revenue in 2019. An entity’s 2019 calendar year will be used for the grant amount calculation. The SBA FAQ offers a preliminary general definition of earned revenue that is “the total of earned revenue from various sales of goods or services, such as admission tickets, merchandise, food and beverages, advertising sales and contracted presentation income.” These revenue definitions are subject to change.
- Total grants received by an eligible entity are capped at $10 million per recipient.
- After receiving an initial grant, qualifying applicants that are experiencing a 70% revenue decline as of April 1, 2021 can receive a supplemental grant equal to half of their initial grant award. Supplemental grant awards will only be awarded after applications received in the first 60 days of the program have been processed.
- According to a February 28 update to the SBA’s FAQ, grant recipients will have one year from the date their awards are disbursed by the SBA to use grant funds. Those receiving an additional Supplemental Phase grant will instead have 18 months from the date their Initial Phase award was disbursed by the SBA to expend all their combined grant funds.
- Allowable expenses include payroll, including payments to independent contractors; rent; fixed costs like mortgage and debt payments; as well as maintenance expenses, administrative costs, and other expenses
Priority period and non-priority reserve
- The program will include two priority application periods. The SBA’s FAQ, updated on February 28, specifies “gross revenue” will be used in calculating the required 90% and 70% declines, and further specifies that gross revenue will include contributions, donations, and grants from any and all sources (excluding any disaster assistance funding), as well as capital funds, restricted grants, an investment income.
- The first 14 days will limit access to applicants that demonstrate a revenue decline of 90% or more from April 1 to December 31, 2020, compared to the same time period in 2019.
- The second 14 days will be limited to those with a revenue decline of 70% or more.
- Relief funds already accessed through the CARES act will not count as revenue for this calculation, and seasonal organizations will use an alternate time period for the comparison.
- At the request of nonprofit advocates, 20% of funds will be reserved for availability after the conclusion of the priority period, accessible to all nonpriority applicants.
- Eligible applicants must submit a good faith certification that “the uncertainty of current economic conditions makes necessary the grant to support the ongoing operations,” and certain applicants must abide by requirements that the recipient “will not abrogate existing collective bargaining agreements” and “will remain neutral in any union organizing effort.”