Shuttered Venue Operators Grant
Welcome to Business Tips with Michael Tobian. Today we will be talking about the Shuttered Venue Operators Grant
As many of you know, our federal leaders have put together another stimulus package with programs for individuals and businesses and organizations. One of these is the Shuttered Venue Operators Grant. I’ll be giving an overview of this today. I’ll start by saying that I’m in no way giving you advice for your business or situation but rather letting you know about information that is publicly available. I’d encourage you to read the legislation language, which is about 30 pages of text, buried in almost 6000 pages of the entire stimulus legislation. Information on that is below and at the end of the video. You can also visit the SBA website to verify this information and see how it will or won’t apply to your business.
What is it:
The Shuttered Venue Operators Grant (sometimes referred to as SVO or Save our Stages) is an SBA grant that was established by the “Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act”, which was recently passed in the last few days of December 2020. As of today, the Grant Applications aren’t available but they will be very soon. This grant is available directly from the SBA and you will apply on the SBA website. The best place to get updated information on it is at this link right here. The link is also in the description (SBA.gov/funding-programs/loans/coronavirus-relief-options/shuttered- venue-operators-grant). They will be notifying us all when it is available. The grant is designed to help live venues and businesses related to live events that were hit extremely hard last year.
Who is eligible:
The grant is specifically made for Live venue operators, promoters, talent representatives, theatrical producers, performing arts organization operators, museum operators, some zoos and aquariums, theater operators and the like. Anyone applying must have been in business as of Feb. 29, 2020. Anyone who wishes to get this grant must not have received a PPP loan after December 27, 2020. People who got it early in 2020 can still apply. The challenge for a lot of us that are deciding which grant to apply for is that PPP loans are ready for applications right now and the SVO Grants are not. My business would get much more money through SVO so I’m holding off on PPP right now. Some people have advised to apply for both and then just accept one. I’m not sure if you can do that or not. There doesn’t seem to be conclusive information on that. My bank told me that my application for PPP would end up being my loan documents, so I decided not to apply for PPP this round until I know what’s going on with SVO. Look at both and talk to smart people and decide what to do there.
How much grant money can I get:
If your business was in operation on or before January 1, 2019, then you would be awarded the lesser of the two options:
- 45% of your 2019 gross earned revenue
- Or 10 million dollars
NOTE: the LESSER of those two
If you began operations after January 1, 2019, then you would get the lesser of of the following:
- The average monthly gross revenue for each full month you were in operations in 2019 multiplied by 6
- OR 10 Million dollars
AGAIN – the LESSER of those two.
Application prioritization and financial qualification:
The SBA is prioritizing applications based on your financial revenue loss from 2019 to 2020. Before I get into this, if your business didn’t experience at least a 25% loss in revenue between these two years due to COVID19, you might not want to bother continuing on because that is the minimum requirement for this grant. I’m going to go over 5 stages of priority in these grant awards. The first 4 only apply to small entities with up to 50 employees. Businesses that are larger than that, won’t be able to apply until the last stage.
First Priority Awards:
Business entities who experienced a 90% or greater revenue loss between April 2020 and December 2020 due specifically to COVID19, will be considered for the first 14 days of grant awards. Again, that is Revenue loss
Second Priority Awards:
Entities that experienced a 70% revenue loss between those same months (April – December) due to COVID19, when comparing 2020 with 2019, we be considered during the next 14 days of grant awards
Third Priority Awards:
Entities who suffered a 25% or greater revenue loss between those same months due to COVID19 will be considered staring 28 days after the first and second priority awards are made Supplemental Funding If you received a SVO grant in the first and second round, you may have the option of supplemental funding, in addition to the SVO awards that you have already received. To qualify, you have to have received the initial grant, AND you have to have experienced a 70% or greater revenue loss in the first quarter of 2021, when compared with the previous year. This award is up to 50% of what was received previously. So, in other words, if you were able to get the grant award in the first and second round, you can get awarded up to 50% of what you got in the first round
Unrestricted, non-priority round:
Finally, we have the last round, which applies to eligible entities of any size, even if you have over 50 employees, who suffered a 25% or greater revenue loss between these two years. This round begins 61 days after initial grant awards. The SBA did a webinar today. It didn’t really have very much information in it that we didn’t already know. The takeaways for me from it were that they aren’t ready yet to accept applications but will soon (as of today’s date, which is January 14 th , 2021) AND that perhaps applicants of any of the priority round may be able to apply at any time but they won’t consider the applications until the appropriate timeframe. They weren’t very clear about that though. They will have more information on the SBA website
ALLOWABLE USE
The funds may be used for specific expenses outlined in the legislation, including:
Payroll costs
Rent payments
Utility payments
Scheduled mortgage payments (not including prepayment of principal)
Scheduled debt payments (not including prepayment of principal) on any indebtedness incurred in the ordinary course of business prior to 02-15-20)
Worker protection expenditures
Payments to independent contractors (not to exceed $100K in annual compensation per contractor)
Other ordinary and necessary business expenses, including maintenance costs
Administrative costs (incl. fees and licensing) State and local taxes and fees
Operating leases in effect as of 02-15-20
Insurance payments
Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production. (May not be primary use of funds.)
They have specifically said that Grantees may not use the award funds for the following purposes:
Buying real estate
Making payments on loans originated after 02-15-20
Making investments or loans
Making contributions or other payments to, or on behalf of, political parties, committees, or candidates for election
Or any other prohibited use by the administrator of the loan
Record Keeping:
Anyone who receives the grant will be required to retain employment records for 4 years following receiving the grant
Application details:
That is about all we know right now. The SBA has indicated that they will give us more information about the actual application and process shortly. If you have any questions, you can email them at SVOGrant@sba.cov and again, you can view the language of the legislation, which is section 324 of the house amendment to the senate amendment to H.R. 133. My copy starts on page 2124
Thanks for watching and good luck