|January 29th, 2021|
Throughout the last few weeks, ICAS has worked in tandem with ICAS members and small business advocates to effectively communicate to United States legislators and the Small Business Administration our belief that many of our member air shows are eligible to receive Shuttered Venue Operators Grants (SVOG) as detailed in the COVID relief bill signed on December 27.
The SVOG program provides up to $15 billion in grants (not loans) to “shuttered venues” that could not offer programming/performances in 2020 due to the pandemic, with eligible applicants qualifying for up to 45% of their gross earned revenue in 2019.
At this time, ICAS has not yet received any official confirmation that air shows do qualify for the program, but the opinions we have solicited and the research we have done thus far indicates air shows DO qualify. Ultimately, the decision remains up to the SBA, and we will likely not have a definitive answer until a member air show is approved for an SVOG grant.
The recent FAQ released by the SBA on the program provides some clarity on key issues, but may lead to confusion, as well. ICAS will continue to seek further clarification and guidance on behalf of our membership and will share as progress is made.
SVOG vs. PPP
As air show event organizers do their own research on the possibility of applying for a Shuttered Venue Operator Grant (SVOG), they will eventually have a choice to make: SVOG or Paycheck Protection Program (PPP). An entity cannot receive both an SVOG grant and a new PPP loan/grant in 2021.
The SVOG program is specific to live events that were not held in 2020. It has dedicated funding of at least $15 million with $2 billion or more set aside for entities/organizations with fewer than 50 employees. And, because eligible applicants may apply for a grant equal to as much as 45% of their gross revenue from 2019, it has the potential to provide more money than the PPP program. But SVOG is new and untested. The details of the program are not yet settled. Although the assessment of ICAS is that SVOG applies to air show event organizers who were unable to hold their events in 2020, we have not yet confirmed that assessment. The process and documents required to apply for an SVOG grant have not yet been released by the SBA. If an air show organizer opts to apply for an SVOG grant and is turned down (for whatever reason), that organization would be permitted to apply for a PPP loan/grant. But there is always the chance that PPP funds might be exhausted by the time the show has been turned down for an SVOG grant and applied for a PPP loan/grant.
The PPP program was launched in the spring of last year as a financial relief tool for businesses impacted by the pandemic. The program was used to distribute $380 billion to U.S. businesses of all shapes and sizes. It is an established program that has received additional funding as part of the COVID relief bill that became law late last month. The processes and the eligibility criteria are clear. If the recipient of PPP funds spends the disbursements as directed, a simple application and documentation process turns the funds from a loan into a grant. Prospective loan/grant recipients – whether they are applying for their first loan/grant or their “second draw” – may apply as early as right now. But, in most cases, the formula used to determine the loan/grant amount for an organization/entity will result in a smaller check from the government than the SVOG process. The pool of PPP funds is being accessed by almost every kind of organization and business in the country; the SVOG grants are limited to shuttered venue operators. And
For both the SVOG and PPP, the vagaries of public policy and the ongoing challenges posed by the pandemic make it unclear how long the current funding will last or whether lawmakers will approve additional money for either program if and when the current funding is exhausted.
As discussed in a previous issue of Fast Facts, an organization cannot apply for both a PPP (after 12/17/20) and an SVOG. (To be clear, an organization that applied for and received PPP funding in 2020 may apply for SVOG funds in 2021 if they have not already submitted an application for the second round of PPP funding.) While the PPP is well-established, it will likely provide less money to an air show than an SVOG grant. Air shows must individually address the decision of applying for a PPP loan/grant that they will likely get vs. waiting to see if they qualify for an SVOG grant which would almost certainly generate more money for the show.
As the situation stands right now, a number of ICAS members have opted to apply for the PPP, foregoing their ability to apply for an SVOG grant. A number of members have decided to wait for additional details about the SVOG with the hope that they will qualify for that program and, potentially, receive a larger grant from it than they would have from the PPP program. The two main differences in the programs are that a) the PPP is a loan that can later be converted into a grant while the SVOG is purely a grant program and b) the amount of money an organization qualifies for under PPP is based almost entirely on payroll while SVOG grants are based on a percentage of all revenue from that event.