When the coronavirus pandemic hit, certain industries experienced a rapid and dramatic impact. Those in fields such as movie theaters, live performing arts, theaters, museum operators, and related nonprofits saw operations cease nearly overnight. With many forced to shut their doors, and those who were able to stay open operating at limited capacity, these types of industries saw their revenue and profits plummet, which hurt everyone involved in working in these types of businesses.

The Office of Disaster Assistance of the U.S. Small Business Administration (SBA) created the Shuttered Venue Operators Grant to offer the economic aid to hard-hit small businesses that would allow them to stay afloat through the pandemic so that they could begin to recover. This program offers over 16 billion in grants for the venues closed in direct response to the pandemic.

The SBA works to help small businesses in the performing arts and venues field who have experienced these types of dramatic negative impacts. If you have been similarly touched by the pandemic and want to know more about how you can secure this type of grant relief, we will walk you through what you should know about the grant and the application process involved.

Who Is Eligible For an SVO Grant?

According to the criteria outlined by the SBA, eligibility for the grant program requires applicants to fall into one of the following categories.

  • Live venue operators or promoters
  • Theatrical producers
  • Live performing arts organization operators
  • Museum operators
  • Motion picture theater operators (including the owners)
  • Talent representatives

The SBA, however, stresses two key points for people who wish to qualify for this grant.

Firstly, eligible entities must have had a business operating as of February 29, 2020.

Secondly, some businesses eligible for this grant may have also applied to the Paycheck Protection Program. Those who received a PPP loan on or after December 27, 2020, and have their grant applications approved, will have the amount they received through the PPP loan subtracted from the eligible amount they receive with the SVO grant.

In this article, we will explore what shuttered venue operators who meet these grant application criteria should do next to secure their grant money as well as, addressing some frequently asked questions (FAQs) to help guide you through the process.

How Much Can You Get For An SVO Grant?

Revenue loss can be devastating for businesses of any size, but the loss that hit many in the venue industry was particularly striking. Businesses can apply to receive grant amounts based on their previous income.

To find the total grant funds, the SBA will calculate 45 percent of the 2019 gross earned revenue. Grantees can receive this amount, with a top amount of $10 million, if they were in business as of January 1, 2019.

If you started your business after January 1, 2019, then the grant awards will be calculated slightly differently. In this situation, the SBA will take your average monthly gross earned revenue for every full month your business was operational during 2019. It will then multiply this amount by 6 to find the amount you receive, up to $10 million.

What Can You Use The SVO Grant For?

Once you receive your grant funds, you can use your money to cover a variety of different types of expenses related to your business. The goal of these funds is to help small business owners remain afloat by covering costs related to employees and administrative costs. In other words, it is not intended to help businesses expand.

Instead, focus on using your funds to help you cover:

  • Your payroll costs, including your ability to pay any independent contractors
  • Bills for your real estate, including your rent or mortgage, as well as utility payments
  • Fees associated with necessary business costs, such as paying your local taxes and federal taxes, the leases you need to keep your business, and your insurance
  • Any worker protection fees you need to cover

Notably, you cannot use the funds to expand your business by buying real estate, to pay off loans that you secured after February 15, 2020, or to get involved with politics.

Keep in mind, as you use this fund, that you will need to maintain proper documentation demonstrating how you used the grant money you were given. Therefore, you want to keep careful records of how much money you receive and where it directly goes as you work to rebuild the business.

Steps To Apply For The SVOG

As you begin the application process, it is important to understand that those with greater revenue loss will be given higher priority. Specifically, there are three tiers of priorities that have been outlined by the SBA.

In the first category, with the highest priority, comes those who saw 90 percent or more gross revenue loss between April 2020 and December 2020 because of the coronavirus pandemic.

The second category is reserved for those who saw 70 percent or greater revenue loss during the same time period from the coronavirus pandemic.

Finally, the third priority is given to those who saw 25 percent or more of their revenue drop between one quarter of 2019 and the corresponding quarter of 2020.

Knowing where your business falls can help you have an accurate understanding of the level of priority you will receive as an applicant.

Gather Your Documents

Before heading into the application portal, you will want to gather your critical accounting documents that demonstrate the level of loss you claimed to have felt when the pandemic hit. This includes:

  • A good faith statement regarding the impact of the pandemic on your business. Be sure to note important details about whether your business had to shut its doors and when you plan on reopening if it did. If your doors are not currently shut, you will need to show that you plan to stay in business after you receive the grant funds.
  • You also need to include documents related to the ownership of your business, such as your business license.
  • You also need to include your tax forms for 2019 and 2020 to document your lost revenue.
  • If you have other relevant financial documents, such as bankruptcy filings, you will want to include those as well.

These types of documents help the agency better understand the complete picture of your business, your prior success, and how the pandemic has impacted your ability to do business.

You can get a full application checklist of the documentation you need to get you started on your shuttered venue operators grant application here on SBA.gov.

After you finish your SVOG application and recite your initial grant, you should note that supplement grants are available in certain situations. Those who lost 70 percent or more of their revenue beginning during this latest quarter, as of April 1, 2021, may qualify for this additional funding. The application portal can help business owners determine eligibility.

Tracking Your Finances With Skynova

For small businesses in performance and related art venues across the country, this past year has been particularly devastating. They have had to cope with shutting down completely or at least operating with severely reduced capacity. This has created a situation where many businesses have struggled to make ends meet, maintain their leases or mortgages, and pay their employees.

The grant offered by the Small Business Administration will go a long way in helping businesses in this sector remain open until the country re-opens, and small businesses like you can bring customers and clients back to your venues.

As you navigate this process, however, you need to make sure you fully understand the importance of accurate accounting and the financial position of your business. You need to provide documentation of how the pandemic has slowed your revenue and your typical income so that you can successfully apply for your grant.

Once you have received the grant, you also need to document how you used the money so that you can demonstrate that you put it to use as it was intended.

Fortunately, small business owners like you can turn to Skynova. With a straightforward system, you will find it simple to track your income and your expenses. You will also gain access to helpful templates that allow you to take care of various accounting needs, such as creating a quote.

For small businesses interested in success, Skynova can help you get there. The platform makes it easy for you to track your account so you can spend more time helping your business thrive.

Notice to the Reader

The content within this article provides general guidelines concerning grants and may not apply to your specific situation. Always consult with a professional accountant to ensure you're meeting accounting standards.