February 3, 2021
Venues affected by the COVID-19 pandemic may be eligible for emergency assistance from the US Small Business Administration (SBA) under the Shuttered Venue Operators (SVO) Grant. Late last week, the SBA released FAQs regarding eligibility, application, use of funds, revenue definitions, and other requirements. Venues that believe they may be eligible for assistance should review this information for eligibility requirements, details about how the funds may be used and how to apply.
Program Details
The SVO Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues, to be administered by the SBA’s Office of Disaster Assistance.
Grant Amount and Use of Funds
For an eligible entity in operation on January 1, 2019, grants will be for an amount equal to 45% of their 2019 gross earned revenue OR $10 million, whichever is less. For an eligible entity that began operation after January 1, 2019, grants will be for the average monthly gross revenue for each full month you were in operation during 2019 multiplied by six (6) OR $10 million, whichever is less.
Funds may be used to pay for specific expenses that include payroll costs, rent payments, utility payments, scheduled mortgage or debt payments and others included in the FAQ. The grant may not be used to purchase 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 Administrator.
Grantees are required to maintain documentation demonstrating their compliance with the eligibility and other requirements of the SVO Grant program. They must retain employment records for four years following their receipt of a grant and retain all other records for three years.
Eligibility
Entities eligible for the SVO grant include live venue operators or promoters, theatrical producers, live performing arts organization operators, relevant museum operators, zoos and aquariums who meet specific criteria, motion picture theater operators, talent representatives, and each business entity owned by an eligible entity that also meets the eligibility requirement. The entity is required to have been in operation as of February 29, 2020, and the venue or promoter must not have received a PPP loan on or after December 27, 2020. More information on eligibility requirements are forthcoming from the SBA.
Application
The timing of the application process, which is not yet open, is based on the level of decline in revenue. The first priority grants will be issued during the first 14 days to those eligible whose revenue “during the period beginning on April 1, 2020 and ending on December 31, 2020, that is not more than 10 percent of the revenue of the eligible person or entity during the period beginning on April 1, 2019 and ending on December 31, 2019, due to the COVID–19 pandemic” (i.e. a 90% decline in earned revenue). The second priority will be issued in the next 14 days to those whose revenue during the same period in the previous sentence was not more than 30% (a 70% decline). The third priority will begin 28 days after the first and second priority awards to those eligible entities with a 25% or greater revenue loss between one quarter of 2019 and the corresponding quarter of 2020.
Next steps
The SBA will be providing more information on eligibility requirements and application guidelines in the coming weeks. Entities who believe they may be eligible for the SVO grant can review the Shuttered Venue Operators Grant page on the SBA website for more information. For questions or assistance, contact your CPA or reach out to GRF CPAs & Advisors at questions@grfcpa.com.
