By: David Rao
Although it’s been a tough twelve months for many live music venues, movie theaters, and performing arts organizations, help may finally be around the corner. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was signed into law, creating a $15 billion fund for grants to shuttered venues to be administered by the Small Business Administration’s (“SBA”) Office of Disaster Assistance. The law states that Shuttered Venues Operator Grants (“SVOGs”) will be made available to the following entities and individuals:
- Live venue operators or promoters;
- Theatrical producers;
- Live performing arts organization operators;
- Relevant museum operators, zoos, and aquariums which meet specific criteria;
- Movie theater operators;
- Talent representatives; and
- Each business entity owned by an eligible entity that also meets the eligibility requirements.
For an eligible entity in operation on January 1, 2019, grants will be the lesser of 45% of their 2019 gross earned revenue or $10 million. For entities which began operation after January 1, 2019, grants will be for either the average monthly gross earned revenue for each full month the entity was in operation during 2019 multiplied by six, or $10 million, whichever is less.
Entities which suffered a 90% or greater revenue loss between April 2020 through December 2020 due to the COVID-19 pandemic are in the “First Priority” category and may apply within 14 days of applications opening. The “Second Priority” category is reserved for entities that experienced a 70% or greater revenue loss during the same time period, and the “Third Priority” category is reserved for entities which had a 25% or greater revenue loss during such period.
The SBA is not currently accepting applications but has targeted early April to begin accepting and processing submissions. Although initially, organizations and companies were limited to applying for either Second Draw Paycheck Protection Program (“PPP”) loans or SVOG grants, the American Rescue Plan, signed into law March 11, states that Second Draw PPP recipients may deduct the value of their PPP loan from their maximum SVOG grant amount.
Eligible entities may consult the SBA’s preliminary application checklist and can begin preparing the relevant documents now. The SBA also allows interested organizations and parties to sign up for email alerts regarding applications and other information.