Struggling music venues across the country received an added lifeline after the Senate and House of Representatives passed a $1.9 trillion stimulus package known as the American Rescue Plan on Wednesday. President Joe Biden signed the legislation Thursday, March 11th.
The new aid package includes an additional $1.25 billion in funding for the Shuttered Venue Operators Grant (originally known as the Save Our Stages Act), which was part of last year’s Covid-19 relief package. It also boasts a crucial new amendment, introduced by Senate Majority Leader Chuck Schumer, that will allow venue owners to apply for additional federal aid as the Small Business Administration continues to set up the SVOG program, which has yet to announce a launch date.
In its original form, the SVOG forbade eligible entities from applying for both a grant and Paycheck Protection Program loan. The new amendment scraps that provision, which is a major boon for venue owners who are still waiting for the Small Business Administration — which was tasked with overseeing the SVOG — to launch the program. Additionally, should a venue take out a PPP loan, the amount they receive will be reduced from the total they would receive from an SVOG.
“This change can save countless venues from bankruptcy, as the immediate PPP2 money will help them hold on until the SVOG funds flow,” Dayna Frank, National Independent Venue Association Board President and CEO of First Avenue Productions in Minneapolis, said in a statement last week when the amendment was announced.
The new amendment is fortuitous for many strapped-for-cash venue owners, who, just a few weeks ago, faced a difficult choice: Wait for a still-unknown date to apply for an SVOG, which caters specifically to the needs of the live entertainment industry; or apply for a PPP loan, before the March 31st deadline, to get a quick influx of cash that can only be put towards certain expenses.
Though frustrating, the reasons the Small Business Administration still has yet to launch the SVOG program are understandable. The SBA has never doled out grants directly to for-profit entities before, and is thus building the SVOG program from the ground up. Not only does the SBA need to ensure the program adheres to the law, but that it has guidelines and fraud safeguards in place not just for venues, but all the other entities the SVOG covers, like independent movie theaters and museums.
“To be fair to the SBA, they are a lender and not a granting arm of the federal government,” Chris Zacher, founder and operator of the Levitt Pavilion in Denver, as well as a NIVA member, said in a recent e-mail. “It takes time to set up grant pathways. The less experienced an origination has with grant programs, the longer it takes to implement them. The SBA has to make sure that they get everything right and that they follow the law as written, that’s and enormous undertaking. At the same time people are frustrated, it’s a classic chicken or egg scenario.”
Complicating the matter further was the SVOG’s priority tiers, which stipulated that only those with 90% or greater revenue loss could apply during the first 14 days after the program launched; those with 70% or greater losses could apply during the next 14-day period, and finally those with 25% or greater losses would be able to apply 28 days after the launch. The tiers were meant to ensure that the hardest-hit entities could apply for aid first, but thsoe in the second or third tier could’ve easily found themselves in a situation where they watched the PPP deadline pass to apply for an SVOG, only to see their application rejected because of a lack of money available. (It’s generally believed the now-$16.25 billion put aside for the SVOG will be enough to cover everyone in need, but with so many applicants expected, concerns it could quickly dry up are unavoidable.)