The U.S. Small Business Administration (SBA) is raising the curtain on the next stage of the $16.25 billion Shuttered Venue Operators Grant (SVOG) program.
The agency said in a news release Aug. 27 that it would begin sending invitations for supplemental SVOG awards, which are to be provided to live entertainment venues and other entities that received an initial grant and reported at least a 70% reduction in 2021 first-quarter revenue as compared to the same period in 2019.
Since opening in April, the SVOG program has awarded around $9 billion in grants to more than 11,500 organizations that suffered revenue loss due to restrictions on public gatherings imposed to limit the spread of COVID-19. As of Aug. 23, the SBA was actively reviewing 1,063 applications, with another 1,288 applications in the queue to start review. The SBA stopped accepting initial applications on Aug. 20.
The initial grants provided recipients with funding equal to 45% of their gross earned revenue, up to a maximum of $10 million. Supplemental award applicants can apply for any amount up to 50% of their original SVOG amount, with the $10 million cap still in place for initial and supplemental grants combined.
The supplemental awards also allow SVOG recipients to extend the time to use their grant funds for expenses accrued through June 30, 2022, and lengthen their budget period to 18 months from the initial grant’s disbursement date.
The SBA said it expects to begin sending out the supplemental awards within two weeks. In the unlikely event that sufficient funding is not available for all eligible entities to receive a supplemental award, priority will be given to applicants that have reported the greatest revenue loss for the first quarter of 2021 compared with the first quarter in 2019.
Live venue operators or promoters received 4,072 SVOG awards through Aug. 23, the largest share among the six types of recipients reported by the SBA. The other grants were distributed as follows: 3,002 to live performing arts organization operators, 1,480 to motion picture theater operators, 1,217 to talent representatives, 838 to theatrical producers, and 712 to museum operators.
The SVOG so far
The SVOG was created by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260, which was signed into law in late December. That bill appropriated $15 billion to the SVOG, which received another $1.25 billion after the American Rescue Plan Act, P.L. 117-2, became law March 11.
Working with vendors to develop a new platform to facilitate the SVOG application and grant process, the SBA didn’t open the application portal until April 8. The agency then had to shut the portal down for repairs after only a few hours due to venue owners and other eligible businesses being unable to upload supporting documents for their applications.
After nearly three weeks of repairs and testing, the SVOG application portal reopened on April 26 and the first applications were successfully submitted to the program.
Grants were slow to be made, due in part to the way the program was structured. While grants are awarded on a first-come, first-serve basis, Congress structured the SVOG to prioritize the hardest-hit venues.
The first 14 days of SVOG awards were reserved for those entities that suffered a 90% or greater revenue loss between April and December 2020 due to the COVID-19 pandemic. Some 3,765 grants were made to applicants in this group through Aug. 23.
The second 14 days of awards (days 15–28) expanded eligibility to entities that suffered a 70% or greater revenue loss between April and December 2020. The SBA made 2,440 grants to applicants in that group.
Following those periods, SVOG award eligibility was expanded to entities that suffered a 25% or greater revenue loss between one quarter of 2019 and the corresponding quarter of 2020. That group received 5,116 grants.
The SBA reported June 4 that it had awarded 50 SVOGs totaling $54.2 million. As of June 10, the SBA had awarded just over 100 SVOGs.
In a news release July 27, the SBA said the pace of SVOG grant-making increased after the agency made adjustments to its process based on successful aspects of the Paycheck Protection Program and Restaurant Revitalization Fund. The SBA did not detail what changes were made to the SVOG process.
AICPA experts discuss the latest on the SVOG and other small business aid programs during a virtual town hall held every other week. The webcasts, which provide CPE credit, are free to AICPA members and $39 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register. Recordings of Town Hall events are available to view for free on AICPA TV.
The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.
AICPA members can learn more about the SVOG on the webpage “Understanding the Shuttered Venue Operators Grant Program.”
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.
— Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.