Over the course of the COVID-19 pandemic, businesses, small businesses in particular, have been hit hard. The Small Business Association (SBA) has launched a number of efforts in order to help small businesses stay afloat during this turbulent time. One such program was the Shuttered Venue Operators Grant Program. While this program stopped accepting new applications as of August 20, 2021, it can still be informative to learn about such SBA programs and monitor the situations should such programs reopen in the future.
The SBA’s Shuttered Venue Operators Grant Program
Established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and amended by the American Rescue Plan Act, The Shuttered Venue Operators Grant (SVOG) program is distributing more than $16 billion in grants to shuttered venues. It is being administered by the Office of Disaster Assistance within the SBA.
Eligible applicants under the SVOG program included live venue operators as well as live venue promoters that were in operation as of February 29, 2020. Applicants were still eligible if they received a PPP loan on or after December 20,2020, but any SVOG grant award would be reduced by the amount received under the PPP loan. As far as how much an eligible applicant could be awarded under SVOG, grants were available in amounts equal to the average monthly gross earned revenue of each month the applicant was in operation over 2019 times six or $10 million, whatever was the lower amount of the two.
The processing of applications was scheduled on a priority basis based on who had suffered the most significant economic losses. First priority, for instance, was given to entities that suffered 90% or more in revenue loss over the course of the time period falling between April 2020 and December 2020 due to the Coronavirus pandemic. Second priority was given to those that suffered 70% or more in revenue loss over that time period and third priority was granted to those that suffered 25% or more in revenue loss over that time period.
If an applicant was awarded a grant, the funds of the great can only be used for specific expenses such as payroll costs and rent as well as utility payments. Scheduled mortgage and debt payments are also allowable as are worker protection expenditures and other ordinary and necessary business expenses. Grant funds are not to be used for the purchase of real estate or making payment on loans that originated after February 15, 2020. Funds are also prohibited from being used to make investments or to be used as political contributions.
Grant award recipients are required to maintain appropriate documentation that shows they have complied with the requirements of the SVOG program. Recipients are required to retain employment records for four years after they receive grant funds. All records must be retained for three years after receipt of grant funds.