SBA Launches the Shuttered Venue Operators Grant
The Shuttered Venue Operators Grant (SVOG) is part of the COVID-19 Relief Bill signed into law on December 27, 2020, and provides over $16 billion in grants to shuttered venues which have been overwhelmingly unable to operate since the beginning of the pandemic. Eligible entities include live venue operators or promoters, theatrical producers, live performing arts operators, motion picture theaters, and relevant museum operators, zoos, and aquariums. However, you must have been in operation prior to February 29, 2020
Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees. Funds may be used for specific expenses, which include payroll, rent, utilities, mortgage interest, etc. Here’s a tutorial on Use of Funds
Here are 15 of the most frequently asked questions about the SVOG:
1. What is an “eligible entity” for an SVOG?
Eligible entities may be live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, and talent representatives, per the Economic Aid Act. Additionally, entities of these types owned by state or local governments (for example, museums or historic homes) are eligible to apply if the governmentally owned entity also acts solely as a venue operator, museum, etc. and not also include other types of entities. For example, a city parks and recreation department that operated a bandstand in a public square along with running various nature parks would not qualify as an eligible entity for an SVOG. Finally, each subsidiary business owned by an eligible entity that also meets the eligibility requirements on its own rights will qualify as an eligible entity.
2. When does a business have to have been established to be eligible to apply for an SVOG?
The business must have been in operation as of February 29, 2020.
3. Is an entity not in business in 2019 but conducting business operations on Feb. 29, 2020, eligible to apply for an SVOG?
Yes, if an entity was not in business during 2019 but was conducting business operations on Feb. 29, 2020, including incurring costs of necessary start-up, preparatory activities in the lead time before an anticipated opening date, it is eligible to apply if it can show the required earned revenue loss. In situations like this, the SBA will use the following alternative method for demonstrating revenue loss based on the approach the Agency is using with the PPP: Firms not in operation in 2019 may qualify for an SVOG if their gross earned revenues for the second, third, or fourth quarter of 2020 demonstrate a reduction of not less than 25% from their gross earned revenue for the first quarter of 2020. For firms that had commenced start-up operations but were unable to open as anticipated due to the pandemic, they would only be eligible under this alternate method if they had earned revenue in the first quarter of 2020 from sources such as advance ticket sales, merchandising, etc. Firms which had been conducting business operations and incurring expenses in 2020 in a pre-opening capacity but which had no earned revenue for the first quarter of 2020 would not be eligible to apply.
4. Is an entity that applied for and received a Paycheck Protection Program loan in July 2020 eligible to apply for an SVOG?
Yes, if an entity applied and was approved for a PPP loan prior to Dec. 27, 2020, it is eligible to apply for an SVOG.
5. Is an entity that applied for a First Draw or Second Draw PPP loan on or after Dec. 27, 2020, eligible to apply for an SVOG?
Yes. While entities originally were prohibited from receiving both forms of SBA assistance, the American Rescue Plan Act, which became law on March 11, 2021, removed this restriction. However, under the law, entities will be ineligible for a PPP loan AFTER they receive an SVOG.
6. Is a mobile entity with no fixed performance space eligible to apply?
No. Among other requirements, the Economic Aid Act requires a venue to have defined performance and audience spaces. If a particular venue cannot meet this requirement, it is not eligible to apply for an SVOG.
7. What disqualifies an entity from SVOG eligibility?
The following types of circumstances would preclude an otherwise eligible firm from an SVOG:
• It does not have a place of business located in the United States, does not operate primarily within the U.S., and does not make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor.
• It was not in operation as of Feb. 29, 2020.
• 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, theatres, museums or talent agencies in more than one country, owns or operates venues, theatres, museums or talent agencies in more than ten states, AND it had more than 500 employees as of Feb. 29, 2020.
• Five other firms with which it is affiliated have already received SVOG awards.
• It is a museum and other museums with which it is affiliated have already received $10 million in SVOG funding.
8. Can a mobile, portable, or touring facility be a qualifying venue for an SVOG?
Yes. Any venue, including traveling tent shows such as circuses and festivals, which meets all the space related requirements in the Economic Aid Act (e.g., defined performance and audience spaces, lighting rig, etc.) will be considered an SVOG-qualifying venue. If a particular venue cannot meet these requirements, it is not eligible to apply for an SVOG.
9. If an eligible entity has applied for or received any grants, loans, or other funding from a state or local governmental relief program is it still eligible to receive an SVOG?
Yes. Receipt of pandemic-related or other assistance from state or local governments does not disqualify an eligible entity from the SVOG program, though an eligible entity must ensure that it does not claim any costs or expenses under its SVOG that it has already received reimbursement or other payment for under another award or program.
10. Are entities whose broader business operations include hosting live performing arts events, such as agricultural fairs or party boats/pleasure cruises that feature concerts, eligible to apply for an SVOG?
No. Only entities whose principal business activity is being a live venue operator/promoter/theatrical producer/live performing arts organization operator, museum operator, motion picture theatre operator, or talent representative are eligible for SVOGs under the Economic Aid Act. Although an agricultural fair or entertainment cruise may include live performing arts events, their principal business activity is something other than serving as one of the eligible entity types in the statute.
11. *Are eligible entities currently involved in bankruptcy proceedings eligible to apply for an SVOG?
Possibly. Eligible entities undergoing a reorganization form of bankruptcy (such as Chapter 11 or Chapter 13) may apply for an SVOG if they entered bankruptcy after Feb. 29, 2020. However, entities undergoing a liquidation form of bankruptcy (such as Chapter 7) are not eligible. In addition, SVOGs made to entities undergoing reorganization bankruptcy may, in SBA’s discretion, be subject to special restrictions or requirements designed to reduce the risk of loss of taxpayer funds.
12. Are entities located in US territories eligible to apply for an SVOG?
Yes. Under the Economic Aid Act, in addition to those located in states, eligible entities in the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession of the United States (e.g., Guam, American Samoa, the U.S. Virgin Islands) are able apply for an SVOG.
13. How will receiving a PPP loan affect an eligible entity’s SVOG award?
Per the American Rescue Plan Act, any entity that receives a PPP loan on or after Dec. 27, 2020 (whether First Draw or Second Draw), will have the PPP loan amount deducted from the SVOG amount. For example, if a jazz club received a PPP loan for $10,000 on Feb. 1, 2021, and then applied for and received an SVOG which, based on the amount of its earned revenue loss would have been $100,000, the jazz club’s SVOG will be reduced by $10,000 and it will receive a $90,000 SVOG. Any PPP borrower that received a PPP loan before Dec. 27, 2020, however, will not have the PPP loan amount deducted from any subsequent SVOG.
14. If a portion of my PPP loan was forgiven, will that affect how much of the loan amount is deducted from my SVOG?
No. The full amount of any PPP loan received on or after Dec. 27, 2020, must be deducted from an entity’s SVOG without regard to whether a portion of that PPP loan was forgiven or not. If the entity received a PPP loan prior to Dec. 27, 2020, the PPP loan and/or its forgiveness status is not factored into an SVOG.
To apply for the SVOG you must have a DUN number and be registered at SAM.gov, the federal procurement system website. A DUN number can take several days to receive and SAM registration can take up to three weeks. If you need help applying for the Shuttered Venue Operators Grant or applying for your DUN and SAM.gov numbers, please contact Rhonda R. Jones at rhonda.jones@uky.edu or 502-779-0957 for assistance.
For additional information on the SVOG, please visit SBA.gov and search for Shuttered Venue Operators Grant. Not sure you qualify? Frequently Asked Questions about SVOG and info on Eligibility requirements