Shuttered Venue Operators – Apply Early for Aid
Though virtually no industry remains untouched by the pandemic’s economic impact, live venue operators are among the hardest hit – and the latest round of COVID-19 relief funding includes special provisions to help them weather the storm. Relief is coming, with the Small Business Administration (SBA) expected to begin accepting applications very soon – but it’s important to apply early.
What is the Shuttered Venue Operators Grant?
The Shuttered Venue Operators (SVO) Grant seeks to distribute aid to venues that have largely closed their doors since the beginning of the pandemic. This grant was put into place in December 2020 as part of the Economic Aid Act. Upon opening, $15 billion in grants will be distributed to live venues and entities in the theatre and performing arts industry in a tiered schedule. The phase that applies depends on their loss of revenue between April 2020 through December 27, 2020:
- Days 1-14 – Loss of 90% or greater revenue
- Days 15-28 – Loss of 70% or greater revenue
- After day 28 – Loss of 25% or greater revenue
According to the SBA, entities eligible for the SVO include:
- live venue operators or promoters
- theatrical producers
- live performing arts organization operators
- talent representatives
- movie theatres
- “relevant” museums
How Does the SVO Impact PPP Loans?
Although entities who received PPP funds during the first draw in 2020 are allowed to apply for SVO, the Economic Aid Act does not allow businesses and organizations to now apply for both SVO and the second draw of PPP loan (loans made after December 27, 2020). In addition, the entity must have been in operation as of February 29, 2020 to qualify. It’s important to look at the options and carefully evaluate which aid option will provide the most benefit for your entity – the SVO or the second-draw PPP loan. Items to consider would be the loss of revenue during the period, the number of employees, and the intended use of the funds.
How Much Could My Entity Get?
Grants will be up to 45% of gross earned revenue, based on 2019 earned revenue, up to a maximum of $10 million. Based on this metric, it is possible that this grant would exceed aid received from other relief measures. In addition, the funds can be used for various specific costs of operating including payroll, rents, and utilities as well as advertising and other ordinary business expenses.
What Do I Do Next?
As noted above, carefully evaluate which option is best for your organization, and be ready to apply.
Be sure to keep aware of the opening of the SVO program so you can apply at the most advantageous phase. For more questions, see FAQs:
If you have questions about which option could provide the most advantage or would like to consult with a tax professional to review your specific circumstances, contact us. We’re here to help.