NEW Shuttered Venue FAQ Specifies Revenue Definitions

This post was originally an email sent to Julie Baker by Heather Noonan, Vice President for Advocacy, League of American Orchestras

Hello!

Well, yesterday’s update to the Shuttered Venues FAQ included many substantial additions and changes. Here is a quick summary we shared with our members this morning:

NEW Shuttered Venue FAQ Specifies Revenue Definitions

On February 28, the Small Business Administration (SBA) posted a substantially updated set of Frequently Asked Questions, outlining information about eligibility for the Shuttered Venue Operators Grants (SVOG) program. The newest FAQ states that declines in gross revenue will determine an applicant's eligibility for the priority grant award periods. Following are several related excerpts:

For determining applicant eligibility for priority periods, how is "revenue" being defined? The SBA will use gross revenues to determine how an entity qualifies for one of the priority periods. How did the SBA determine what "revenue" to consider for establishing priority period eligibility? Congress simply referenced "revenue" for the SVOG priority periods in the Economic Aid Act. General rules of statutory interpretation require an agency to give meaning to every word where possible and apply the word's ordinary meaning. In the legislation, Congress used "revenue" in setting forth the priority periods, not "earned revenue" and specifically used the term "earned revenue" in other areas, illustrating its understanding of a distinction between the two terms and the ability to use the limitation where Congress deemed it appropriate.How is "gross revenue" being defined by the SBA? Gross revenue is functionally equivalent to 'receipts,' which the SBA has defined under 13 C.F.R. § 121.104 as meaning "all revenue in whatever form received or accrued from whatever source." This will include contributions, donations, and grants from any and all sources (excluding any disaster assistance funding).How will capital funds, restricted grants, or investment income affect an entity's SVOG application? The SBA will take such financial resources into consideration when the Agency is examining an eligible entity's gross revenue. For example, the SBA will consider such sources of revenue for purposes of determining whether an applicant meets the requirement that no more than 10% of its 2019 gross revenue came from the Federal government (excluding disaster assistance) or determining whether it can demonstrate sufficient gross revenue loss to qualify for one of the priority periods.

Also, when calculating the maximum grant amount of 45% of 2019 earned revenue, the FAQ states the following:

Will SBA look to calendar year 2019 or fiscal year 2019 earned revenues as the basis for calculating award amounts? The SBA will use an applicant's fiscal year 2019 earned revenues as the basis for determining the award amount for both Initial Phase and Supplemental Phase SVOGs.

The FAQ also includes an extensive list of defined terms and updates regarding eligible uses of funds and applications by affiliated organizations. The program is not yet open for applications, and the SBA has confirmed that further guidance is still in development. The agency plans to post comprehensive guidance and then allow for a period of time for applicants to become familiar with the application and gather supporting materials before the grant application portal is opened.

In the meantime, please consult the following resources:

            Latest SBA Shuttered Venue Operators Grants Frequently Asked Questions (Updated February 28, 2021)

            SBA Shuttered Venue Operators Grants Home Page

            League Summary of 2021 Federal Relief Opportunities

The League of American Orchestras is in dialogue with SBA officials to seek answers to ongoing questions regarding SVOG eligibility. We are also advocating on the full array of COVID-19 relief needs as Congress nears completion of the next COVID-19 relief package, expected to be finished by mid-March.

Access to complete information on the grant requirements for the SVOG program is essential for potential applicants making immediate decisions regarding their capacity to support workforce retention, and as they must also choose whether to apply for a Shuttered Venue Grant or access a 2021 Paycheck Protection Program forgivable loan. This need is made even more urgent as the SBA announced last week a 14-day prohibition on Paycheck Protection Program applications by employers with 20 or more employees through March 10, and the PPP program is set to expire on March 31, 2021.

The League has been speaking up to call for immediate clarity on SVOG eligibility requirements, and joined the broader nonprofit sector in asking Congress to expand the end date for the Paycheck Protection Program from March 31, 2021 to the end of the calendar year.

Best wishes,

Heather

Heather Noonan (she/her/hers, What's This?)

Vice President for Advocacy

League of American Orchestras 

1602 L Street, NW, Suite 611, Washington, D.C. 20036 

(t) 202 776-0215

hnoonan@americanorchestras.org

Find all the information you need on our new website: it’s searchable, mobile-friendly, and full of gorgeous photos from our members: americanorchestras.org.

The content of this email is for general educational purposes only and is not intended to provide legal advice on any subject matter. This should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.