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SBA, Wrapping Up Work on SVOG Grants, Faces Legal Challenges on Eligibility

  • U.S. Small Business Administration has just 18 applications still under review for its Shuttered Venue Operators Grant program, according to the latest program report
  • The SBA is facing legal challenges from some of the 4,802 applicants denied funding, with some entities accusing the agency of an inconsistent approval process
  • A total of $13.7 billion in SVOG funding was approved for 12,824 businesses

Summary by Dirk Langeveld

The U.S. Small Business Administration has largely wrapped up work on its Shuttered Venue Operators Grant program, with only a handful of applications still outstanding. However, the program’s awards were well below the funding cap and some entities have filed legal challenges against the agency’s approval process.

The SVOG program, which was funded with $16.2 billion, was set up to assist businesses like live venue operators and promoters, performing arts organizations, and movie theaters with grants equal to 45 percent of their gross earned revenue. The program closed to new applications in August, when it began making supplemental awards to recipients that could show a revenue loss of at least 70 percent when comparing 2021’s first quarter revenues with the same period in 2019.

According to CNBC, at least 25 businesses that were denied funding under the program have filed lawsuits against the SBA. Those denied a grant have sometimes complained that they were put at a competitive disadvantage since other entities with similar business models were able to receive funding. There have also been complaints that the SBA did not offer a rationale for the rejection or that the approval process was inconsistent.

  • The SBA’s latest report on the program, from Dec. 27, shows that just 18 applications are still under review
  • The SVOG program has awarded $13.7 billion in grants and disbursed $13.6 billion of this funding
  • Of the 17,644 applications received, 12,824 were approved initially or upon reconsideration while 4,802 were declined
  • $10.7 billion was awarded in the initial round of funding, with an average grant of $830,00; the SBA also approved 8,607 of the 8,709 applications submitted by recipients who were invited to seek supplemental grants, funding an additional $3 billion in awards
  • Live events venues, movie theaters, and others who were eligible for the program are facing new disruptions due to the spread of COVID-19 variants
  • Other companies in the industry that support venues, such as event planners and lighting companies, are also calling for a relief program that will offer broader assistance

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