On March 12, 2021, the Small Business Administration (SBA) issued new guidance for the Shuttered Venue Operators Grant (SVOG) program in the form of an update to its list of frequently asked questions (FAQs). The guidance includes requirements for eligibility for the grant and a checklist of documents for potential applicants – at this time, the application itself is not yet available.
The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on Dec. 27, 2020, provided $15 billion in funding for the SVOG program. Eligible applicants to the SVOG may qualify for funds equal to 45 percent of gross earned revenue, with a maximum single grant amount awarded up to $10 million. Eligible entities, which must have been in operation as of Feb. 29, 2020, include the following:
- Motion picture theater operators
- Theatrical producers
- Live venue operators or promoters
- Live performing arts organization operators
- Museum operators, zoos and aquariums that meet certain criteria
- Talent representatives
- Each business entity owned by an eligible entity that also meets the eligibility requirements
According to the FAQs, entities that applied for and were approved for a Paycheck Protection Program (PPP) loan prior to Dec. 27, 2020, are eligible to apply for an SVOG. Additionally, the FAQs state that entities that applied for a first-draw or second-draw PPP loan after Dec. 27, 2020, are eligible to apply for an SVOG. The American Rescue Plan Act removed the restriction for such entities to apply for an SVOG when it became law on March 11, 2021. However, entities will be ineligible for a PPP loan after receiving an SVOG.
According to FAQ #9 regarding the usage of funds, the guidance states the following regarding the Single Audit Act threshold:
“As a Federal grant program, all funds awarded under the SVOG will count toward an entity’s requirement to comply with the Single Audit Act if it receives $750,000 or more in Federal grant funding during a single fiscal year.”
While the SVOG can provide valuable funding to eligible entities, organizations should keep in mind that such funding comes with compliance requirements, which can potentially be costly to implement. As such, making sure appropriate resources and oversight are in place will be crucial in achieving compliance. You can read more about grant compliance considerations in DHG’s article Grant Compliance Begins with Board Oversight.
Entities who believe they may be eligible for the SVOG should begin reviewing and preparing documents listed from the SBA’s preliminary checklist. For more information about the SVOG and application requirements for eligible entities, please reach out to us at firstname.lastname@example.org.