The recent signing of the American Rescue Plan Act provided $16 billion in grants to shuttered venues. Such grants are being administered directly by the SBA’s Office of Disaster Assistance. The purpose of this article is to provide a brief summary of the Shuttered Venue Operators Grant Program and additional resources you can turn to in order to get additional detail.
WHAT IS THE SHUTTERED VENUE OPERATORS GRANT PROGRAM?
The Shuttered Venue Operators Grant (SVOG) program was created by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, and amended by the American Rescue Plan Act. The SBA has provided guidance on its website and also has an extensive list of frequently asked questions.
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.
WHAT ENTITIES ARE ELIGIBLE FOR THE PROGRAM?
The following entities are eligible to apply for the program:
- 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
These entities are specifically identified as not eligible for the program:
- A venue that does not have a defined performance and audience space.
- Is not located or have operations in the U.S. and does not make a significant contribution to the U.S. economy.
- Was not in operation as of February 29, 2020.
- A publicly traded corporation, or majority owned or controlled by a publicly traded corporation.
- 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 (excludes disaster assistance).
- 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.
- If an entity applies for a Restaurant Revitalization Grant, they cannot also apply for an SVOG
WHAT IF YOUR ORGANIZATION RECEIVED A PPP LOAN?
The American Rescue Plan modified the rules so an entity that applied for a PPP loan (first or second draw) on or after December 27, 2020 can also apply for an SVOG.
- If an entity received an SVOG, they cannot receive a PPP loan after they receive the SVOG.
- If an entity receives a PPP loan (first or second draw) in 2021 the PPP loan amount will be deducted from the SVOG amount.
- For example, if an organization received a PPP loan for $50,000 on March 1, 2021, and then applied for an SVOG of $200,000, the SVOG will be reduced by $50,000 and it will receive a $150,000 SVOG.
- If the PPP loan was received in 2020, the SVOG is not reduced by the loan.
WHAT SHOULD YOU DO NOW TO PREPARE?
The application period for the SVOG is expected to open on April 8. The SBA has posted a preliminary application checklist that can help your organization prepare for submitting an application. Review the checklist for items you can start now in order to be ready to submit the application as soon as possible.
For more information about the SVOG program, contact Kyle Robbins, CPA, audit partner, or Richard Scoresby, CPA, tax partner, at Larson & Company today.
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