Client Alert 
April 7, 2021

The federal Shuttered Venue Operators Grant (SVOG) program was established in late December 2020 to provide economic assistance to certain arts and entertainment venues and other businesses that were shut down due to COVID-19.

More than three months after over $16 billion was apportioned towards funding the SVOG program, the U.S. Small Business Administration (SBA) is finally expected to begin accepting SVOG applications on or around April 8, 2021.

Detailed information regarding the SVOG program is available from the SBA, and the most pertinent provisions, including how an eligible business can apply for a SVOG, are summarized below.

Eligible Businesses

SVOG-eligible businesses include live venue operators or promotors, theatrical producers, live performing arts or organization operators, museum operators, movie theater operators, and talent representatives that were fully operational on February 29, 2020 and had at least a 25% reduction in gross revenue in any quarter of 2020 as compared to the same quarter in 2019. Additional eligibility information can be found here.

Eligible businesses may receive a SVOG even if they applied for and received a PPP Loan. However, if the PPP Loan was received on or after December 27, 2020, the PPP Loan amount will be deducted from the SVOG amount. Eligible businesses will be ineligible for a new PPP Loan after they receive a SVOG.

Grant Amounts

Eligible businesses that were in operation on January 1, 2019 are eligible for a SVOG in an amount equal to 45% of their 2019 gross earned revenue or $10 million, whichever is less.

Eligible businesses that began operations after January 1, 2019 are eligible to receive a SVOG in an amount equal to the average monthly gross earned revenue for each month the business was in operation during 2019 multiplied by 6, or $10 million, whichever is less.

Use of Grant Funds

SVOG funds must be used for specified expenses including payroll costs, rent payments, utility payments, scheduled mortgage payments, scheduled debt payments, worker protection expenditures, payments to independent contractors, other ordinary necessary business expenses including maintenance costs, administrative costs, state and local taxes and fees, operating leases in effect as of February 15, 2020, and insurance payments.

Any SVOG funds that remain unused as of one year from the date the grant is disbursed by the SBA must be returned to the SBA.

Application Process

Eligible businesses can apply using the SVOG Portal, accessible here. To ensure your eligible business is ready to submit an application as soon as the application portal opens, we recommend reviewing the SBA’s Preliminary Application Checklist, available here.

As a preliminary step, in order to submit a SVOG application your business first needs to apply for a Data Universal Numbering System (DUNS) number for each physical location of your business here and then register with the U.S. government’s System for Award Management (SAM) here.

Once SVOG applications are open, the SBA will allocate funds based on amount of revenue lost in two week tranches, with businesses suffering a COVID-19-related revenue loss of 90% or greater between April 2020 through December 2020 receiving the first set of grants, businesses suffering a COVID-19-related revenue loss of 75% or greater between April 2020 through December 2020 receiving the second set of grants, and businesses that suffered a 25% or greater earned revenue loss between one quarter of 2019 and the corresponding quarter of 2020 last in line to receive a grant. 
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If you have questions or would like additional information, please contact any of our Labor & Employment attorneys  or the primary EGS attorney with whom you work.

This memorandum is published solely for the informational interest of friends and clients of Ellenoff Grossman & Schole LLP and should in no way be relied upon or construed as legal advice.