SBA Announces Launch Date for Shuttered Venue Operators Grant Program
March 29, 2021
The Small Business Administration (SBA) has announced that the Shuttered Venue Operators Grant (SVOG) program will begin accepting applications on April 8, 2021. The program, which was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act) and modified by the American Rescue Plan Act of 2021 (ARPA), will provide $16.25 billion in grants to venues that were severely impacted by the COVID-19 pandemic.
According to the SBA, eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with $10 million being the maximum amount available for a single grant award. $2 billion of funds in the program will be reserved for eligible businesses with up to 50 full-time employees. Applicants can sign up here to be notified when the electronic application process is available.
The SBA has provided details about the program, including who will be eligible for the grants, and has also provided a preliminary checklist of documents that will be required when submitting an SVOG application. Below are some key details about the program, but applicants should bear in mind that the guidance has been evolving rapidly through new FAQs and may continue to change. As of March 22, 2021 , the SBA has issued seven versions of the FAQs, adding new clarifications each time. Below is relevant information from the FAQs:
Eligibility for SVOG
Here are the criteria outlined by the SBA.
Eligible entities must have been in operation as of February 29, 2020 and include:
Entities that were not in business in 2019 are eligible if:
Previous restrictions on applying for both a Paycheck Protection Program (PPP) loan and a SVOG have been lifted as a result of ARPA. Borrowers who receive Second Draw PPP Loans may have their SVOG amount reduced by the amount of the Second Draw PPP Loan.
Through the FAQs, the SBA has announced that there will be no appeals process if an application is denied. Therefore, we encourage you to reach out to the Smith & Howard tax team for help with your application if you think you may be eligible.
According to the SBA, businesses that suffered the greatest economic loss will have their applications processed first. The order of priority provided by the SBA:
Allowable Use of Funds
The SBA has outlined how funds from the SVOG can be used. The expenses that qualify include:
Funds may also be used to reimburse an owner who used their own funds to pay employees’ wages and operating expenses if the loan was:
Businesses may qualify for grants equal to 45% of their 2019 gross earned revenue. If a business began operations after January 1, 2019, then the amount of grant for which they should apply will be for their average monthly gross revenue for each full month in operation in 2019, multiplied by six. There is a cap of $10 million on single grants awarded to an eligible applicant.
The SBA is defining gross revenue in this way:
Only earned revenue can be included when calculating gross earned revenue. Among items not considered earned revenue:
Entities that want to apply for an SVOG are encouraged to register for a DUNS number (the Dun & Bradstreet Data Universal Numbering System) so they can register in the System for Award Management (SAM). The application process will be made through the SAM system. Once the DUNS number is received, entities should immediately begin registering in SAM.gov, as the SAM registration may take up to two weeks. In addition, the items on this checklist that are relevant to your business need to be gathered in preparation for filing. The SBA has stated that this is not an all-inclusive list and additional documents may be required.
Businesses will not qualify for the grants if they:
There is currently a bipartisan bill moving through the Georgia Legislature that proposes to make sales of tickets, fees or charges for admission to fine arts performances or exhibitions tax exempt. This is a restoration of a previous exemption. Smith & Howard is monitoring this amendment to Title 48 of the Official Code of Georgia and will keep our nonprofit clients updated if it is passed.
Our team of nonprofit and tax experts is following the SVOG program closely. Given its complexity, we invite our clients to call us for help at 404-874-6244. If you need more information about whether your business qualifies for this grant program or would like help once the SBA begins accepting applications, please complete our contact form.
If you have any questions and would like to connect with a team member please call 404-874-6244 or contact an advisor below.CONTACT AN ADVISOR
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