Shuttered Venue Operators Grant Program Shifts to Supplemental Awards
Update (8/27/2021): The SBA, which stopped accepting new SVOG applications Aug. 20, has started sending invitations to the hardest-hit entities to apply for its supplemental awards program.
The Shuttered Venue Operators Grant (SVOG) is a $16.2 billion program that opened application process in early April to help eligible businesses access funds to offset the economic hardships created by the COVID-19 pandemic.
Although the SVOG grant program has closed, the SBA will continue providing relief through a supplemental awards program. These awards will be available to previous SVOG recipients who demonstrated a 70 percent loss in revenue in first-quarter 2021 compared to the same quarter in 2019.
Originally, to be eligible, a business had to be fully operational by Feb. 29, 2020, not be listed on a stock exchange or owned and controlled by an entity listed on the stock exchange and not employ more than 500 employees. Eligible entities include:
- Live venue operators or promoters
- Live performing arts facility operators
- Movie theater operators
- Theater producers
- Museums, zoos and aquariums who meet the criteria
- Talent agents
Updated SVOG FAQs, the application checklist and Applicant User Guide are available on the SBA website (under Supplemental Documents) to facilitate the application process.
These businesses have to be open or intend to resume operations, while talent agents currently need to be representing or managing artists. Facilities such as live venues need a defined performance space, require a paid ticket or cover charge to attend most shows and have staff to carry out at least two of the following roles (e.g., stage manager, security, promoter).
Movie theaters who wish to qualify must have at least one auditorium with fixed seating, a projection booth, require paid tickets to attend and market shows in printed or electronic media.
Of note: $2 billion of the $16 billion has been set aside for eligible applicants with up to 50 full-time employees.
The SBA portal remains open for all applicants and awardees and can be used to apply for a supplemental award if your business receives an invitation.
What Amount Can Be Requested for an SVOG Supplemental Award?
Under the SVOG supplemental awards program, applicants can ask for 50% of the original award amount, capped at $10 million (original and supplemental amounts combined).
The funds can be used for certain expenses, including the following, as examples:
- Rent or mortgage
- Utility charges
- Safety expenses for employees (personal protective equipment, etc.)
- Maintenance costs
- State and local taxes
- Insurance payments
If one receives a supplemental award, they can extend the time to use their SVOG grant funds for expenses accrued through June 30, 2022. They'll also be able to extend their budget period to 18 months from the initial grant’s date of disbursement.
If funding is not available for eligible entities for a supplemental award, then priority goes to those applicants who have shown the greatest loss in first quarter 2021 revenue compared to the first quarter in 2019.
To avoid any issues that could result in fraud, funds from the SVOG program cannot be used to make investments, purchase real estate or contribute to political parties or candidates. Consult with your accounting professional and legal advisor for more restrictions.
Are There Recordkeeping Requirements for an SVOG?
Recipients of SVOG funds must maintain all documents that verify compliance with the program, including retaining employment records for four years following issue of grant, and all other records for three years.