THE SHUTTERED VENUE OPERATORS GRANT PROGRAM CAN ASSIST CERTAIN FLORIDA BUSINESSES

THE SHUTTERED VENUE OPERATORS GRANT PROGRAM CAN ASSIST CERTAIN FLORIDA BUSINESSES
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Written By: Phil Kabler

The Shuttered Venue Operators Grant Program (SVOG), a new financial resource, has been created to benefit certain entertainment-related businesses.

The Shuttered Venue Operators (SVO) Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues, to be administered by the SBA’s Office of Disaster Assistance.

Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.

For additional details, see our Shuttered Venue Operators Grants Frequently Asked Questions.

Who can apply

Eligible entities include:

o    Live venue operators or promoters

o    Theatrical producers

o    Live performing arts organization operators

o    Relevant museum operators, zoos and aquariums who meet specific criteria

o    Motion picture theater operators

o    Talent representatives, and

o    Each business entity owned by an eligible entity that also meets the eligibility requirements

 Other requirements of note:

o    Must have been in operation as of February 29, 2020

o    Venue or promoter must not have received a PPP loan on or after December 27, 2020

Detailed information on eligibility requirements coming soon.

Amount of SVO Grant

Grant amount will be either:

  • For an eligible entity in operation on January 1, 2019, grants will be for an amount equal to 45% of their 2019 gross earned revenue OR $10 million, whichever is less.
  • For an eligible entity that began operation after January 1, 2019, grants will be for the average monthly gross revenue for each full month you were in operation during 2019 multiplied by six (6) OR $10 million, whichever is less.

How to apply

SBA is in the process of setting up the grant program and is not yet accepting applications. Those who have suffered the greatest economic loss will be the first applications processed under the following schedule:

Note: On January 20, 2021, SBA updated the proposed plan for issuing Shuttered Venue Operators Grants during the first and second priority periods. To clarify, priority awardees will not need to satisfy the small employer set-aside. During the first 59 days of opening the SVO Grants, SBA will reserve no less than $2 billion of program funding for grants to entities that have no more than 50 employees.

First Priority

1st 14 days of grant awards

Entities that suffered a 90% or greaterrevenue loss between April 2020 through December 2020 due to the COVID-19 pandemic.

Second Priority

Next 14 days of grant awards

Entities that suffered a 70% or greaterrevenue loss between April 2020 through December 2020 due to the COVID-19 pandemic.

Third Priority

Beginning 28 days after First & Second Priority Awards are made

Entities that suffered a 25% or greaterrevenue loss between one quarter of 2019 and the corresponding quarter of 2020.

Supplemental Funding

Available after First & Second Priority

Recipients of First and Second Priority round who suffered a 70% or greater revenue loss for the most recent calendar quarter (as of 04-01-21 or later)

 

Allowable use of funds

Funds may be used for specific expenses, which include:

  • Payroll costs
  • Rent payments
  • Utility payments
  • Scheduled mortgage payments (not including prepayment of principal)
  • Scheduled debt payments (not including prepayment of principal) on any indebtedness incurred in the ordinary course of business prior to 02-15-20)
  • Worker protection expenditures
  • Payments to independent contractors (not to exceed $100K in annual compensation per contractor)
  • Other ordinary and necessary business expenses, including maintenance costs
  • Administrative costs (incl. fees and licensing)
  • State and local taxes and fees
  • Operating leases in effect as of 02-15-20
  • Insurance payments
  • Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production. (May not be primary use of funds.)

Grantees may not use award funds to:

  • Buy real estate
  • Make payments on loans originated after 02-15-20
  • Make investments or loans
  • Make contributions or other payments to, or on behalf of, political parties, political committees, or candidates for election
  • Any other use prohibited by the Administrator

Grantee Recordkeeping

Grantees will be required to maintain documentation demonstrating their compliance with the eligibility and other requirements of the SVO Grant program. They must retain employment records for four years following their receipt of a grant and retain all other records for three years.

Application and additional guidelines will be posted when available.

It is important to note that the SVOG program has not yet gone fully online. Here is the link to an introductory webcast by the SBA introducing the SVOG, its criteria, and its requirements.

As with all of the pandemic-related support programs, interested businesses should consult with their attorneys, accountants, and banker.

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