SBA's shuttered venue cash off to slow start as 'nervous, worried' small businesses await backstop
Thousands of independent venues are still awaiting federal grants that were approved back in December to help businesses stay afloat, Small Business Administration (SBA) data showed this week.
The agency’s Shuttered Venue Operators Grant (SVOG) program received $16 billion in federal funds, signed into law back on December 27th. Venues, promoters, talent agencies and other cultural institutions are eligible to receive up to $10 million based on their 2020 revenue loss.
Yet even after funds started to roll out last week, the monies still aren't being dispersed fast enough. On Monday, the SBA released data showing that a mere 31 grants have been awarded as of midday June 1st — barely a fraction of more than 13,000 applicants who have applied.
And out of over $11 billion requested from cash-strapped businesses, the agency has doled out a slim $34.2 million in total. The SBA did not immediately respond to Yahoo Finance’s request for comment.
According to SBA guidelines, SVOG funds would be awarded to businesses with the greatest need first, i.e. those that took a revenue hit of 90% or more. After that, entities that lost 70% or more due to the pandemic would be covered.
Still, the slow pace of disbursement is frustrating for those still suffering in the wake of COVID-19 lockdowns, which include live music and theatrical venues.
“Our members are pretty desperate,” said Esther Baruh, director of government relations at the National Association of Theatre Owners. “They’re at the end of their options for keeping their businesses alive.”
The SVOG program hasn’t been an easy process for venue owners: in fact, there have been quite a few roadblocks that have caused application delays, according to some.
Most notably, the application portal on the website crashed in April. And even now that the website has been fixed, some users have reported technical issues.
At a Congressional hearing last week, SBA Administrator Isabella Guzman acknowledged that the application’s tech issues in the program had “lots of controls for eligibility requirements.”
Yet Chris Johnson, owner of Classic Cinemas in Downers, Illinois, told Yahoo Finance that he “couldn’t delete files that I uploaded. The other thing that was a bit disconcerting was they said you’ll receive an email confirming your status in the next few minutes [but] we never received an email.”
On April 15th, Johnson reopened his business with the expectation that he’d have enough money to ramp up payroll. “I needed the backstop of the grant, which I thought was kind of assured.”
Johnson is still waiting for his application to be approved, and losing sleep in the meantime as he grapples with another obstacle. For unexplained reasons, the SVOG system has placed him on a “do not pay” list.
“I'm like, if you have my social security number, my EIN [employee identification number] and everything,there's nothing that says do not pay,” he told Yahoo Finance. “I'm hoping that gets cleared up, immediately. I'm still in this nervous, worried state.”
