Many business owners who own venues have had to close down their business due to COVID-19. Business owners like Sam Sundos, the general manager of Brooklyn café and dance club Kinfolk told Rolling Stone, “It would’ve been a year of just costs with no revenue,”. They eventually closed down. That is the story for many business owners crushed under the impact of COVID-19
However, all hope is not lost, you may be able to get some money. The Shuttered Venue Operators Grants were established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and further amended by the American Rescue Plan Act. There is around $16 billion in funding that would be administered to shuttered venues (places closed or limited in service due to COVID-19) by SBA’s Office of Disaster Assistance.
What Kind of Help Will Shuttered Venue Operators Grants Provide?
If you’re eligible (more on that in the next section), you may receive 45% of your gross earned revenue, with the maximum amount available for a single grant award of $10 million. In addition to that, $2 billion is reserved for eligible applications with up to 50 full-time employees.
If your business has been in operation since January 1, 2019, the grant will be for an amount that is either equal to 45% of your 2019 gross earned revenue OR $10 million. Your grant amount is whichever is less. For example, if your 2019 gross earned revenue is $5 million, you’d get 45% of that. However, if your gross earned revenue is say $30 million, 45% of that amount is more than 10 million dollars so the grant you’d receive is capped at 10 million dollars.
Just remember to keep four years’ worth of employee records after being given the grant as well as three years worth of other records.
Who Can Apply Shuttered Venue Operators Grant?
According to the SBA, the following are requirements to be eligible for the grant:
Live venue operators or promoters
Live performing arts organization operators
Relevant museum operators, zoos, and aquariums who meet specific criteria
Motion picture theater operators
In addition to that, your business needs to satisfy these requirements:
Each business entity owned by an eligible entity that also meets the eligibility requirements
Must have been in operation as of February 29, 2020
Venue or promoter who received a PPP loan on or after December 27, 2020, will have the SVOG reduced by the PPP loan amount
Must have a DUNS number from Duns and Bradstreet
Must be registered in the System for Awards Management (SAM.gov)
When Can I Apply for the Shuttered Venue Operators Grant?
You may have heard that the applications closed temporarily but they’re open now! You can apply for the grant here. However, before you apply you can prep all your documents and make sure you have your paperwork in order using the SVOG preliminary application checklist.
How will the Shuttered Venue Operators Grant Be Issued?
This grant will go out in phases with the hardest hit getting it first. That means those with 90% or greater loss, then the next 14 days with 75% or greater loss.
The next phase is the third phase and it is slated to begin 28 days after the first and second phase awards are made. The third phase, according to the SBA is for businesses with “25% or greater earned revenue loss between one quarter of 2019 and the corresponding quarter of 2020.”
Finally, there is supplemental funding which will be awarded after all the priority funding phases have passed. The supplemental funding is for businesses who were awarded the grant and suffered a 70% or greater revenue loss. This loss would have to be for the most recent calendar quarter which is April 1, 2021, and later.
What Can You Use the Shuttered Venue Operators Grant For
According to the SBA, you can use the grant money to cover the following expenses:
Scheduled mortgage payments (but not a prepayment of principal)
Scheduled debt payments (not including prepayment of principal on any indebtedness incurred in the ordinary course of business prior to February 15, 2020)
Worker protection expenditures
Payments to independent contractors (not to exceed $100,000 in annual compensation per contractor)
Other ordinary and necessary business expenses, including maintenance costs
Administrative costs (including fees and licensing)
State and local taxes and fees
Operating leases in effect as of February 15, 2020
Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production. (May not be primary use of funds)