The Shuttered Venue Operators Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and 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.
Watch this video to learn about use of funds.
Learn more about the Shuttered Venue Operators Grant program: https://www.sba.gov/svogrant
Learn more about all of SBA’s pandemic relief programs: https://www.sba.gov/coronavirusrelief
Shuttered Venue Operators Grant (SVOG)
Use of Funds
This presentation provides a general overview of SVOG program the SBA is administering related to provisions in the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act).
In the event of any inconsistency between this presentation and the Economic Aid Act, Application Forms and Instructions, and other guidance (together, official guidance), the official guidance governs.
What is the Definition of Use of Funds?
For the purposes of SVOG- the terms “payroll costs,” “covered mortgage obligation,” “covered rent obligation,” and “covered utility payment,” are assigned to the same terms as under the PPP set forth in the CARES Act.
The “covered worker protection expenditure” is assigned to the same terms as under the PPP set forth in the Economic Aid Act.
What are Ordinary and Necessary Expenses?
For the Purposes of SVOG, ordinary and necessary expenses will be defined using the IRS definition:
An expense that is common and accepted in your trade or business.
• One that is helpful and appropriate for your trade or business.
• An expense does not have to be indispensable to be considered necessary.
What are the Permitted Expenses?
An entity may only pay the following costs with grant funds:
Payroll (as defined in the PPP and solely with respect to employees who have a principal residence in the United States).
Principal or interest payments on covered mortgage obligations.
• Rent payments;
• Utility payments;
• Principal or interest payments on indebtedness or debt instruments incurred in the ordinary course of business prior to February 15, 2020;
• Covered expenses associated with protecting workers from exposure to the novel coronavirus and
• Payments to independent contractors up to $100,000 in annual compensation.
What are Examples of Ordinary and Necessary Expenses?
• Administrative costs, including fees and licensing costs;
• State and local taxes and fees;
• Operating leases in effect as of February 15, 2020; and • Required insurance payments. • May also, but not primarily, use for advertising, production, transportation, and capital expenditures relating to producing a live performance or exhibition.
What are Other Permissible Expenses?
In applying the use of funds provisions of the statute, SBA has determined that the following expenses would also be allowable:
Reimbursement for previously paid costs;
Refund payments to patrons for cancelled shows;
• Cost of depreciation in accordance with the principles outlined in 2 C.F.R. § 200.436; and
• Artists guarantees or deposits.
What are the SVOG Prohibited Uses?
A grant may NOT be used for:
• Real estate purchases;
• Principal or interest payments on loans made after February 15, 2020; and
• Relending or otherwise investing the funds;
• Political contributions to candidates or political action committees; or
• Other ineligible purposes as determined by the SBA
For additional information visit www.sba.gov/svogrant