In addition to important changes related to PPP loans, a second round of PPP funding, and reforming the Employee Retention Tax Credit, the Consolidated Appropriations Act of 2021 included the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act). Part of the Economic Aid Act is focused on providing financial assistance to industries that were obligated to close down or greatly limit regular operations in response to the COVID-19 pandemic.
The Shuttered Venue Operators Grant (SVOG) Program, to be administered by the Small Business Administration (SBA) Office of Disaster Assistance, provides for $15 billion in grant funds to support eligible entities that have experienced at least a 25% reduction in revenues. Eligible entities may qualify for a grant equal to 45% of their gross earned revenue, with the maximum amount of $10 million available for a single grant award.
Eligible entities under the SVOG Program must have been in operation as of February 29, 2020 and must not have applied for or received a PPP loan on or after December 27, 2020. Types of eligible entities include:
Any business entity owned by an eligible entity will also qualify for SVOG. The SBA is expected to provide detailed information on eligibility requirements.
The amount of a grant for an eligible entity is determined as follows:
The grant program is still being organized, and the SBA is not yet accepting applications. Businesses that have experienced the greatest economic loss will be the first applications processed under the following schedule:
As with other Economic Aid Act relief, the SVOG funds may only be used for specific expenses, including:
Further, SVOG award funds are specifically not allowed to be used for the following activities: buying real estate; making payments on loans originated after February 15, 2020; making investments or loans; making contributions or other payments to, or on behalf of, political parties, political committee, or candidates for election; or any other use prohibited by the Administrator.
Grantees must maintain documentation demonstrating their compliance with the eligibility and other requirements of the SVOG Program. Employment records must be retained for four years following the receipt of a grant and all other records must be retained for three years. The SBA has further indicated that application and additional guidelines will be posted when available.
P&N’s dedicated professionals are committed to understanding and applying this information to help our clients. Please contact us or connect with your P&N advisor to discuss your organization’s questions, concerns, and priorities.