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Glitches Fixed as SBA’s Shuttered Venue Program Readies to Reopen

April 13, 2021, 9:16 PM

A federal grants program for entertainment venues closed during the pandemic may be days away from re-opening after technical issues shut it down last week, a Small Business Administration official told Bloomberg Tax.

The $16.2 billion program’s problems come just as some states are lifting pandemic-related capacity restrictions and warmer weather arrives. Some venues, like the Los Angeles cinemas icon ArcLight Cinemas and Pacific Theatres, announced this week they won’t be reopening locations.

The Small Business Administration closed the Shuttered Venue Operators Grant (SVOG) program about four hours after it opened on April 8 after technical issues from the agency’s vendor, Salesforce.com Inc., beleaguered its systems as many tried to apply.

The technical issues have been identified and resolved, but the SBA is taking time to ensure no other problems arise, Barbara Carson, the SBA’s deputy associate administrator for the Office of Disaster Assistance, said Tuesday.

“We’re telling the potential applicants we’re moving as fast as we reasonably can to give them that confidence that the process is going to be fair, it’s going to move quickly. We know they need the funds and to not count themselves out,” she said.

Saleforce didn’t immediately return a request for comment.

The SBA also took time to ensure other agencies like the IRS and Office of Management and Budget are prepared to address the tax treatment of grants and provided application forms, Carson said.

While Carson couldn’t pinpoint an exact time the program would reopen, she said the agency is conducting several quality checks. The agency will give advance notice when it’s ready to reopen, she said.

Waiting for Relief

Unlike Paycheck Protection Program loans—the main source of pandemic relief from the agency— the SVOG program was designed to provide grants to a more narrow set of businesses affected by the pandemic. The program was first created by the December pandemic relief law and was expanded in the latest law signed in March (Public Law 117-2).

The grants are for businesses in operation before before Feb. 28, 2020. The funds are planned to be distributed on a need-basis in four priority tiers. The top priority is for entities that saw 90% or greater revenue loss from April 2020 through December 2020 due to the pandemic.

“Unfortunately, the delay means that those businesses that had planned on applying could be hitting cashflow issues: They’re wondering if they can rehire, can get started, get things ramped up—start planning these events,” said Kristy Illuzzi, senior technical manager with American Institute of CPA’s firm services section. “The timing is unfortunate.”

While applicants wait for the program to reopen, they should prepare all the documents they need to ensure they can receive a grant, Illuzzi said.

Applicants need a host of documents like tax returns, payroll records, and other financial documents signed by executives. In addition, applicants need a DUNS number— a unique nine-character number used to identify the organization—and a System for Award Management (SAM) account to receive a grant.

Those things, Illuzzi said, could take time. Especially if the company isn’t used to working with the government. In a way, she said, the delay in opening the program allows companies to double-check they have everything they need the moment the program opens.

“The glass-half-full aspect of things is that it has given those businesses more time to get everything together,” she said.

‘Stimulus and Help’

The longer reopening is delayed, the more intense the needs become. The pandemic has caused massive disruptions in the venue and entertainment industry, said Brad Mayne, president and CEO of the International Association of Venue Managers.

“If we don’t host events, we have no revenue coming in. We need stimulus and help,” Mayne said.

Carson said the SBA is focused on fixing and ensuring the grants program will work as smoothly and as quickly as promised.

Carson said the agency understands these are tough times, and acknowledged the seriousness of delaying badly needed grants to shuttered venues.

“This has been really hard for us to see happen to this industry,” Carson said. “They were among the first to close. They need this funding now. And we want to get it to them.”

To contact the reporter on this story: David Hood at dhood@bloomberglaw.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Meg Shreve at mshreve@bloombergtax.com

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