Maryland Legal Alert for Financial Services
Changes to Shuttered Venue Operators Grant Program
In our Maryland Legal Alert in February 2021, we noted that the U.S. Small Business Administration (SBA) was preparing to administer the Shuttered Venue Operators (SVO) Grant program. The program, which was created by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, included $15 billion in aid for eligible businesses. SVO Grant program details are available here.
Entities eligible to apply include live venue operators or promoters, movie theater operators, and talent representatives. When the SVO Grant program was first announced by the SBA, eligible entities could not have received a Paycheck Protection Program (PPP) loan on or after December 27, 2020. As a result, an entity previously could not receive a second draw PPP loan and a SVO Grant.
On March 11, 2021, President Joseph Biden, Jr. signed the American Rescue Plan Act of 2021 (Act). Under the Act, the prior prohibition on an entity receiving a second draw PPP loan and a SVO Grant was removed. Now, entities that elected to obtain a second draw PPP loan can apply for a SVO Grant, and — if approved — the applicant’s SVO Grant amount will be reduced by the amount of the applicant’s second draw PPP loan.
The use of grant funds is limited to operating expenses, such as payroll costs, rent payments, utility payments and scheduled debt payments on any indebtedness incurred in the ordinary course of business prior to February 15, 2020. The funds may also be used for advertising, production transportation and capital expenditures relating to producing a theatrical or live performing arts production, so long as that is not the primary use of the funds. SVO Grant funds may not be used to buy real estate, make investments or loans, make political contributions, or make payments on loans originated after February 15, 2020, among other things.
The SBA released FAQs about the SVO Grant program on March 5, 2021, but it still has not released details concerning when applicants can begin submitting SVO Grant program applications.
Please contact Christopher R. Rahl with questions concerning the SVO Grant program or the PPP loan program.
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Christopher R. Rahl
410-576-4222 • email@example.com