The Shuttered Venue Operators Grant (SVOG) program, which began accepting applications on April 26, 2021, provides more than $16 billion in grants to venues such as performing arts organizations, music venues and movie theaters that were shuttered by the COVID-19 pandemic. The SVOG program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, which was passed in December 2020, and amended by the American Rescue Plan Act, signed into law March 11, 2021.
Qualifying venues may be eligible for grants equal to 45% of their gross earned revenue, up to a maximum grant of $10 million. Here’s what small business owners should know about the SVOG program, which will be administered by the SBA’s Office of Disaster Assistance.
Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors.
Who is eligible for SVOG?
Eligible applicants for these grants include:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Museum operators, zoos and aquariums
- Motion picture theater operators
- Talent representatives
Live venue operators or promoters, theatrical producers and live performing arts organizations must meet one of two criteria:
- Their principal business must be organizing, promoting, producing, managing or hosting live concerts, comedy shows, theatrical productions or other events by performing artists. The venue must charge a fee (either ticket sales or a cover charge) and performers must be paid based on a percentage of sales, a guarantee or other mutually beneficial formal agreement. Venues must generate at least 70% of revenues through ticket sales; production fees/reimbursements; nonprofit educational initiatives; or the sale of event food, beverages or merchandise.
- Their principal business must be selling tickets available to the public at least 60 days before live concerts, comedy shows, theatrical productions or other qualifying events for which performers are paid based on a percentage of sales, a guarantee or other mutually beneficial formal agreement.
These venues must also have a defined performance and audience space, mixing equipment, a public address system and a lighting rig; market their performances; and hire at least one person to perform two of the following jobs: sound engineer, booker, promoter, stage manager, security personnel or box office manager.
Museum operators, zoos and aquariums must have an indoor exhibition space that is used for its principal business and was affected by pandemic restrictions, and have an auditorium, theatre, performance or lecture hall with fixed audience seating and regular programming
Motion picture theater operators must have at least one auditorium with a movie screen and fixed seating, must have a projection space with at least one projector, and must sell tickets and market movies.
For talent representatives, at least 70% of operations must involve managing or representing performers, who must be booked or represented primarily at live events and paid based on ticket sales or entrance fees.
In addition, all qualifying applicants must:
- have been fully operational as of February 29, 2020
- have seen a reduction of at least 25% in gross earned revenue during at least one quarter of 2020 compared to the same quarter of 2019.
If your business was operational as of February 29, 2020 but not open in 2019, you are eligible if gross earned revenues for the second, third or fourth quarter of 2020 were reduced at least 25% from gross earned revenue for the first quarter of 2020.
Businesses with no staff or payroll, such as sole proprietors who rely on independent contractors and have no employees, can qualify as long as they meet all the criteria.
How much money can you get from the program?
- Eligible entities that were operating on January 1, 2019, can receive grants equal to 45% of their 2019 gross earned revenue or $10 million, whichever is less.
- Eligible entities that began operation after January 1, 2019, can receive grants for the average monthly gross earned revenue for each full month they were operational in 2019, multiplied by six, or for $10 million, whichever is less.
What can SVOG grant money be used for?
Eligible uses of SVOG funds include but are not limited to:
- Payroll costs
- Rent payments
- Utility payments
- Scheduled mortgage payments (not including prepayment of principal)
- Scheduled debt payments (not including prepayment of principal on debts incurred in the ordinary course of doing business before February 15, 2020)
- Worker protection expenditures (such as personal protective equipment or pandemic-related safety modifications)
- Payments to independent contractors (not to exceed $100,000 in annual compensation per contractor)
- Other ordinary and necessary business expenses, including maintenance costs
- Administrative costs (including fees and licensing)
- State and local taxes and fees
- Operating leases in effect as of February 15, 2020
- Insurance payments
- Advertising, production transportation and capital expenditures related to producing a theatrical or live performing arts production. (However, this cannot be the primary use of the funds.)
If business owners used personal funds to cover these expenses, they can reimburse themselves for that money as far back as March 1, 2020, as long as they can document the transfer of personal funds into the business and what the money was used for.
What can’t SVOG grant funds be used for?
SVOG grant money cannot be used to:
- Buy real estate
- Make payments on loans originated after February 15, 2020
- Make investments or loans
- Make contributions or other payments to, or on behalf of, political parties, political committees or candidates for election
- Any other use prohibited by the SBA Administrator
When can I apply for an SVOG grant?
The online portal for SVOG applications opened April 26, 2021. Funds in the Initial Award Phase will be released in three priority “waves,” each available for 14 days.
- Wave One: Entities that suffered a 90% or greater revenue loss between April 2020 through December 2020 due to the COVID-19 pandemic
- Wave Two: Entities that suffered a 70% or greater revenue loss between April 2020 through December 2020 due to the COVID-19 pandemic
- Wave Three: Entities that suffered a 25% or greater revenue loss between one quarter of 2019 and the same quarter of 2020
These priority waves are designed to prioritize those business owners who have suffered the biggest losses. (During the first 59 days of the program, $2 billion of program funding has also been set aside for grants to entities with 50 or fewer full-time employees.) Within each wave, however, applications will be processed in the order in which they are received, rather than the amount of lost revenues. Since demand for the grants will undoubtedly be high, eligible business owners should apply as soon as possible.
Supplemental Phase: After the Initial Award Phase, recipients of SVOG awards who suffered a 70% or greater revenue loss for the most recent calendar quarter (as of April 1, 2021, or later) may qualify for additional funding. (You can’t apply for a supplemental grant yet; initial awards must be distributed before the supplemental phase begins.)
When do I need to use my SVOG grant money?
If you receive SVOG funds in the Initial Phase, you have one year from the date the funds are disbursed to use the money. If you receive an SVOG grant during the Supplemental Phase, you have 18 months from the date your Initial Phase award was disbursed to spend all the money from both awards. Any grant funds not used by the deadline must be returned to the SBA.
I received other pandemic-related loans or grants. Does that mean I can’t apply for an SVOG?
Paycheck Protection Program (PPP) loan recipients may apply for an SVOG. However, the amount of any PPP loan received on or after December 27, 2020, will be deducted from your SVOG. In addition, once you’ve received an SVOG, you are no longer eligible for a PPP.
If you have received an SVOG or have a pending application for one, you cannot apply for the Restaurant Revitalization Fund.
Receiving assistance, pandemic-related or otherwise, from your state or local government won’t disqualify you from eligibility for an SVOG. Just be sure not to claim any expenses under SVOG for which another program has already reimbursed you.
How do I apply for an SVOG?
Use the SBA’s Application Checklist, FAQs and Applicant User Guide to help you complete the online application. You can also get help from an SBA resource partner, including a SCORE mentor, Small Business Development Center, Women’s Business Center or Veterans Business Outreach Center.
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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.