SBA issues FAQs for Shuttered Venue Operators Grants

A set of frequently asked questions released by the U.S. Small Business Administration does not specify a starting date for the new Shuttered Venue Operators Grant (SVOG) program but does recommend actions potential applications should be taking while the SBA builds the application platform.

The $15 billion SVOG was created by The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260, the COVID-19 relief bill that was signed into law in late December and also revived the Paycheck Protection Program (PPP).

The revived PPP, also administered by the SBA, began accepting applications on Jan. 11 but no starting date has been announced for the Shuttered Venue program, which will provide eligible applicants with grants equal to 45% of their gross earned revenue, up to a maximum of $10 million.

What venue operators should be doing now

In the Shuttered Venue FAQs, published Jan. 29, SBA says that is “working expeditiously” to open the program’s application window and that potential applications should frequently visit www.sba.gov/coronavirusrelief for updates. In the meantime, SBA said, potential SVOG applicants should be taking steps to prepare while the SBA works to build the application platform for the program.

Specifically, entities are encouraged to obtain a Dun & Bradstreet (DUNS) number so they can then register in the System for Award Management (SAM.gov). Other identifiers, such as an Individual Taxpayer Identification Number or Employer Identification Number, cannot be used.

Entities that have or receive a DUNS number should immediately begin registering in SAM.gov as the SAM registration may take up to two weeks after submission.

In addition, the SBA recommends that potential applicants gather documentation showing their employee count and monthly revenue so that they can calculate the average number of qualifying employees the entity has had over the prior 12 months. The FAQs provide guidance on how to determine employee count on page 6.

SVOG applicants also will need to determine and document the extent of gross earned revenue loss experienced in 2020 compared to 2019.  The FAQs provide details on how to calculate revenue on pages 6-7. Other required information includes floor plans, contract copies, and other evidence.

Eligibility details

Entities eligible for an SVOG, per the Economic Aid Act, may be live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theater operators, and talent representatives. The FAQs add that entities of those types owned by state or local governments are eligible to apply if the governmentally owned entity acts solely as a venue operator, such as for a museum or historic home, and does not also run other types of entities. For example, a city parks and recreation department that operates a bandstand in a public square but also runs several nature parks would be ineligible to apply for an SVOG.

In addition, SVOG grant applicants must meet the following eligibility requirements.

• Must have been in operation on Feb 29, 2020.
• Must not have an application pending for a PPP loan. If the entity has applied for either a first- or second-draw PPP loan on or after Dec. 27, 2020, they are ineligible to apply for an SVOG until their PPP loan application is denied. Entities may not apply for a PPP loan and an SVOG at the same time. However, an entity that applied for and received a PPP loan during the first iteration of PPP last year is eligible to apply for an SVOG.
• Must have defined performance and audience spaces with fixed seating (which is defined as seating permanently fixed to the floor or ground.) The Economic Aid Act does not allow for temporary, removable, modular, convertible, or other non-fixed seating arrangements. This means that mobile entities such as a circus, fair, or business that provides talent for events such as weddings are not eligible for a Shuttered Venue grant if they do not meet the performance space and fixed seating requirements.
• Outdoor venues can apply for an SVOG if they are otherwise eligible under the rules for their type of entity. For example, a drive-in movie theater without fixed seating does not meet the requirement that a motion picture theater operator must have at least one auditorium with a motion picture screen and fixed audience seating.

A venue operator is not eligible for an SVOG if any of the following apply.

• It received a PPP loan on or after Dec. 27, 2020.
• It is a publicly traded corporation, or is majority owned and controlled by a publicly traded corporation.
• It presents live performances or sells products or services of a prurient sexual nature.
• More than 10% of its 2019 gross revenue came from the federal government (not counting disaster assistance).
• It owns or operates venues, theaters, museums, or talent agencies in more than one country; owns or operates venues, theaters, museums, or talent agencies in more than 10 states; AND it had more than 500 employees as of Feb. 29, 2020.

Additional, more specific questions about entity eligibility are covered on pages 3 and 4 of the FAQs.

AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held most weeks on Thursday at 3 p.m. ET. The webcasts, which provide CPE credit, are free to AICPA members. Go to the AICPA Town Hall Series webpage for more information and to register.

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.

Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA, CPA.com, and fintech partner Biz2Credit.

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.