Thousands of entertainment venues have had to shut down during the pandemic due to public health restrictions and consumer concerns about staying safe from the virus. On December 27, 2020, the Federal Government passed new legislation, the Economic Aid Act, to help provide financial relief for venue operators like theaters, movie theaters, museums, performing arts organizations, and nonprofit organizations that offer live public performances as part of their mission.
The Small Business Administration (SBA) has recently announced more details on these new federal Shuttered Venue Operator (SVO) grants. Applying for an SVO could help nonprofit organizations stay afloat during the next few months until COVID vaccines become more widely available and the economy can reopen more fully.
With applications opening on April 8, 2021, we’ve answered your top questions about applying for the SVO grants and mapped out the next steps for your nonprofit organization.
Who is eligible for SVO grants?
According to the Economic Aid Act, these organizations are eligible for SVO grants:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Museum operators
- Motion picture theatre operators
- Talent representatives
If your nonprofit organization’s mission is part of any of those categories, you might be eligible for relief from an SVO grant.
How much money is available for SVO grants?
The program includes a total of $15 billion for SVO grants, with $2 billion reserved for organizations with less than 50 employees.
How much money is my organization eligible to receive?
SVO grant amounts depend on a few factors: how long an eligible organization has been in business and how much revenue the organization lost due to the pandemic.
- If your organization was operating as of January 1, 2019, SVO grants will be equal to 45% of 2019 gross earned revenue, or $10 million, whichever amount is less.
- If your organization began operations after January 1, 2019, your SVO grant will be calculated as the average monthly gross revenue that you earned in 2019, multiplied times six (6), or $10 million, whichever is less.
Can my organization receive both an SVO grant and a Paycheck Protection Program (PPP) loan?
Yes. If your organization already was approved for a PPP loan before December 27, 2020, you can also apply for a Shuttered Venue Operator (SVO) grant. However, if you applied for a PPP loan (First Draw or Second Draw) on or after December 27, 2020, you cannot apply for an SVO grant unless your PPP loan application is declined.
How long does an organization need to be in business to qualify?
To get an SVO grant, your organization must have been in operation as of February 29, 2020.
How can my organization use SVO grant funds?
SVO grant funds can be used for several purposes, including payroll, utilities, rent, scheduled mortgage and debt payments (but not prepayment of interest), payments to independent contractors, administrative costs, and other business expenses.
There are, however, a few allocation restrictions to keep in mind. For example, you cannot use these funds to buy real estate or make payments on loans that originated after February 15, 2020. Be prepared to keep documentation on how your organization utilized the funds and demonstrate compliance if needed.
How does my organization apply for an SVO grant?
The SBA will open grant applications on April 8, 2021. Until then, you can start preparing for the application process now:
- Get a DUNS number if you don’t already have one. Register for a Dun and Bradstreet (DUNS) number for your organization.
- Sign up for the federal System for Award Management (SAM). SAM registration may take up to 2 weeks to process.
- Gather documentation on your organization’s number of employees, monthly revenues, and other details such as your venue’s floor plans, contract copies, and any other evidence related to your venue operations.
- Calculate the extent of gross earned revenue loss your organization experienced from 2019-2020.
With a DUNS number and SAM registration, you’ll be able to apply once applications open.
When will SVO grants be available?
SVO grant applications will open on April 8, 2021. The SBA Office of Disaster Assistance will distribute the funding, and more announcements are expected soon. Check the SBA website for more details.
Where can I get more information about Shuttered Venue Operator (SVO) grants?
Aldrich is Here to Help
Many wonderful nonprofit organizations have taken a financial hit because of the pandemic. Hopefully, the Shuttered Venue Operator (SVO) grant can be a resource to help your organization make it to the other side of this crisis.
Until the SVO grant portal opens, we recommend using this time to prepare all necessary documentation and review your budget. Talk to your Aldrich Advisor if you have questions on how to take advantage of federal relief and other forms of financial aid.
Meet the Author
Bobby LaCour, CPA
Aldrich CPAs + Advisors
Bobby joined Aldrich in 2005 and has over ten years of experience in public accounting. He specializes in providing attest and accounting services to nonprofit, manufacturing and other private middle-market entities. He also has extensive experience with internal control and operations analysis. Balboa Park Online Collaborative audit committee member American Society of Certified Public Accountants member…
- Nonprofit organizations
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- Certified Public Accountant