Shuttered Venue Operators Grant Funds Are Finally Trickling Out

The almost complete elimination of in-person events made the COVID-19 small business downturn an economic catastrophe for live music venues, theaters, and museums. Most of these venues have been unable to hold any of their signature events for a year or longer. Some managed to squeak by with livestreamed events or crowdfunding campaigns that made a small fraction (at best) of their normal revenue. But their doors—and box offices—stayed closed for longer than anyone could have anticipated.

That’s why the US Small Business Administration (SBA) is awarding more than $16 billion in Shuttered Venue Operators Grant funds. These are small business grants that do not need to be paid back, money intended to reimburse those venues for all that they’ve lost over the last year so they can survive and continue their cultural legacies. 

Several months after it was created in President Trump’s late December relief package and then bolstered under President Biden’s American Rescue Plan, the Shuttered Venue Operators Grant (SVOG) was finally slated to open on April 8, hoping to give long-closed entertainment venues a chance to recoup their COVID-19 losses.

But it didn’t open on April 8. On what would have been the application site’s first day of operation, the site immediately crashed, according to the New York Times. The site never even went live for applications that day, and by 4pm Eastern Time, the SBA “abandoned its effort to salvage the broken system and shut it down for the day. No applications were processed.”

That website would remain closed for repairs for more than another 2 weeks. According to an SBA spokesperson, the agency retooled the online application portal to “ensure fair and equal access once reopened, since this is first-come, first-serve.” The SBA wanted to avoid another situation where larger companies got the COVID relief funds while smaller businesses were shut out. 

But the technical difficulties have been worked out, and the site started taking applications on April 24, 2021. More than 14,000 venues have already applied, according to a June 14 report from the SBA, with 411 grants approved.

Only $304.2 million of the $16 billion has been awarded, so if you have a shuttered live arts venue, it’s definitely time to apply for a grant.

How Does the Shuttered Venue Operators Grant Work?

Theaters and live music venues are eligible for the grants, but so are some other types of similar facilities and adjacent industries. As the SBA explains, these types of entities are eligible for a Shuttered Venues Operators Grant:

• Live venue owners, operators, or promoters
• Theatrical producers
• Live performing arts organizations and operators
• Museum operators
• Movie theater owners and operators
• Talent representatives

The relief comes in the form of grants, but you’ll have to prepare some bookkeeping and documentation to show how much revenue your venue has lost because of the pandemic.  According to the SBA, “Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million.”

In other words, you have to prove how much you lost, and that calculation is based on your business’s 2019 revenue. If your venue opened after January 1, 2019, you’re still eligible based on your average monthly revenue for the months you were open prior to the pandemic. 

Even if you haven’t applied yet, you probably have not missed your chance at a grant. The “First Priority” round is expected to be awarded starting this week and will only go to businesses that ”suffered a 90% or greater gross revenue loss between April 2020 through December 2020 due to the COVID-19 pandemic.”

Then a “Second Priority” batch of loans will be approved for businesses whose applications show they’ve lost 70% or more of their revenue during the pandemic. The Third Priority group will address those that have lost 25% of their revenue, followed by another possible round of additional supplemental funding afterward for venues that have previously received funds.

According to the SBA, the grant money must be used on these (and only these) expenditures:

• Payroll costs
• Rent payments
• Utility payments
• Mortgage payments 
• Debt payments 
• Safety expenditures
• Payments to independent contractors 
• Necessary business and maintenance expenses
• Administrative costs 
• State and local taxes 
• Payments on leases in effect before February 15, 2020
• Insurance payments
• Advertising and production costs

Some of these have conditions, so you’ll want to read the allowable use of SVOG funds carefully before applying.

How to Apply for a Shuttered Venue Operators Grant 

If you want to apply for a Shuttered Venue Operators grant, you’ll need to register for an SBA account for your small business if you don’t already have one.

The application process will be time-consuming, but the SBA has provided a number of other materials to help you prepare your application. There’s an SVOG application checklist that describes all the documentation, information, and technological tools you’ll need to apply. The SVOG application user guide provides step-by-step instructions for filling out your grant application.  

And perhaps most importantly, the SBA has a detailed list of cross-program eligibility on SBA COVID-19 relief options that details other grant and loan programs for which your small business may be eligible. Unfortunately, that list does show that the amount of any PPP loan funds you receive could be deducted from your grant. But it also shows other relief programs your small business could access, like the Restaurant Revitalization Fund and Economic Injury Disaster Loans (EIDL). 

The Shuttered Venues Operators Grant had a delayed start, but small businesses that are still worried about surviving will surely take the extra relief. Because venues may be able to reopen and stay open this time, so the show must go on.