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Everything You Need To Know About The Shuttered Venue Operators Grant

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Shuttered Venue Operators Grant

As applications will be accepted starting April 18, here is everything you need to know about the Shuttered Venue Operators (SVO) grant.

While the return of PPP loans and expanded tax credits grabbed many of the headlines when the government passed stimulus bills in December 2020 and March 2021, the new Shuttered Venue Operators (SVO) grant program could also play a significant role in helping eligible businesses.

Established by the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act on December 27th, 2020, SVOG is designed to provide financial assistance to SVOs who have struggled due to the pandemic. Let’s take a closer look at what this grant program entails so you can determine if it makes sense for your organization.

What exactly is the Shuttered Venue Operators (SVO) grant program

With the SVOG, live venue operators who qualify can receive up to $10 million in grant funds. This program consists of two waves: an initial grant and a supplemental grant. If you collect the initial grant, you can expect 45% of your 2019 gross revenue.

The supplemental grant is equal to 50% of the amount you receive via the initial grant. Keep in mind that you won’t be eligible for a supplemental grant until your initial grant

What SVO funds can be used for

The SVO grant recipients can use the funds for a wide variety of expenses, including:

  • Rent
  • Payroll
  • Administrative costs like licensing and fees
  • Utilities
  • Maintenance
  • Debt payments
  • Independent contractor payments
  • Local taxes and fees
  • Required insurance

However, please note that the grant funds cannot be used to buy real estate; make debt payments on debts incurred after February 12, 2020; make investments or loans; or contribute to political parties or candidates.

Who is eligible to apply

The SVO grant program will offer up funds to a specific set of businesses that operate live venues or serve a role in the performance arts industry. These companies must have been operating as of February 29, 2020, and have not received a PPP loan on or after December 27, 2020.

Businesses that generally qualify include:

  • Motion Picture Theater Operator: You have at least one auditorium with a screen, fixed seating, and one projector. Your business operates when guests pay a fee in exchange to watch movies at your establishment.
  • Museum Operator: You run your museum for a certain purpose and consider it your main source of business. Also, you host regular events there and have at least one auditorium with fixed seating.
  • Talent Agent: You’re considered a ticket agent if 70% of your job is to represent live artists. Your ticket sales determine how these artists receive compensation.
  • Performing Arts Operator or Live Venue: You charge a cover and pay performers with a cut of it. Also, at least 70% of your revenue stems from ticket sales, refreshments, and merchandise.

In addition, your business must prove that it was fully functional by February 29th, 2020 and experienced at least a 25% revenue loss. Also, you should reopen or have a plan to do so on or before the date you receive your grant.

SAM account requirement

Any business that wants one of these grants must have an active government System of Award Management (SAM) account, so it’s crucial to sign up quickly at SAM.gov. To sign up, you must first create a login.gov user account and then use that same login information to sign up for SAM. When you are registering for SAM, you will also need to provide the following data that should be tied to your business:

  • Dun & Bradstreet DUNS number: Acquiring a DUNS number is free and typically takes one to two business days to process. You can get the DUNS number free here.
  • Tax Id Number (TIN) and Taxpayer Name: A TIN will typically be either your Employer ID Number (EIN) or Social Security Number (SSN), depending on what type of business you own. It’s possible your Taxpayer Name is not the same as your legal business name, so be sure to double-check this.
  • A CAGE or NCAGE number: If you already have a CAGE/NCAGE number, you are all set. If you don’t have one, you’ll automatically be assigned your SAM.gov registration is finished.
  • A NAICS code: This code identifies what industry your business serves. You can look up NAICS codes here.
  • Electronic Funds Transfer (EFT) Information: You’ll need to provide your bank routing and account numbers to receive funds.

How to apply

The SBA, instead of specific banks and other lenders, is distributing SVOGs directly. Therefore, you can apply through them via the online portal. Check the Shuttered Venue Operators Grant page on SBA’s website often as they haven’t begun to accept applications as of February 2021.

Once applications are available, however, you can expect shuttered venue operators who have been hit the most financially to have their applications processed first.

When to apply

The SBA announced the portal for applications would likely open on Thursday, April 8, 2021. Check back daily on the Small Business Administration (SBA) website if you intend to apply and you can sign up for email notifications from the SBA as well.

However, since it may take a few weeks to register and activate a profile SAM.gov, it’s a good idea to start that process now if you haven’t already.

Priorities in disbursing funds

The SVO grant funds will be disbursed to applicants in the order of those who have been hit hardest first and those that were hurt the least later.

How do PPP loans affect SVO grant eligibility

Courtesy of the American Rescue Plan Act (ARPA), now businesses can receive both PPP loans and grants.

However, it matter which one you apply for first. Any venues that receive an SVO grant will be ineligible to receive a new PPP loan after the grant is issued. If a company seeking an SVO grant receives a PPP loan on or after December 27, 2020, then they will have the PPP loan deducted from the SVO grant total.

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