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Second stimulus business grants for live venues
This program offers up to $10 million if your bottom line relies on ticket sales.
Of the $900 billion coronavirus relief bill passed by Congress in late December 2020, $15 billion is earmarked for a new grant program focused on helping venues, museums, theaters and related businesses that rely on ticket sales for live events. The government is expected to issue funds first to businesses hit the hardest by the economic fallout of COVID-19 — with the option to apply for more funding if you haven't recovered enough by April 2021.
How to get a shuttered venue grant
The government hasn't yet released information to the public about how eligible businesses can apply for this new grant program. But it should be available from the Small Business Administration's Office of Disaster Assistance in the coming weeks.
Similar to applying for PPP and similar loans, you'll likely need to certify in good faith that you meet this grant program's extensive requirements to the best of your knowledge and need the funds to operate. Once available, grants will be rolled out in a few phases.
First wave of priority grants
During the first 14 days grants are available, the new grant program will award funds to entertainment venues facing the largest revenue drops. To qualify for a first priority grant, your business must have seen a 90% or greater revenue loss between April 1 and December 31, 2020, when compared to the same period in 2019.
Second wave of priority grants
In a second 14-day period, grants will be awarded to businesses that have seen at least a 70% drop in revenue between April 1 and December 31, 2020, when compared to the same period in 2019.
Don't qualify for a priority grant? After the first 28 days of the program, the SBA will open up the program to other businesses affected by COVID-19. Because the stimulus doesn't allow the SBA to issue more than 80% of funds in the first two waves of priority grants, funds aren't expected to run out before then. Yet prepare to apply as soon as you're eligible: Grant programs historically run out of funding quickly.
Small employer grants
The SBA is setting aside $2 billion in grants to businesses with up to 50 full-time employees. The catch is that after 60 days, the funds will be available to all other businesses. If you own a smaller business, apply as soon as you can to avoid competing with larger businesses.
You and your business must meet several sets of requirements to be eligible for the new grant program.
Generally, this grant is available to live entertainment businesses that include:
- Live venue operators
- Live venue promoters
- Theatrical producers
- Live performing arts organization operators
- Museum operators
- Motion picture theater operators
- Talent representatives
Basic business requirements
To qualify, eligible businesses must meet a set of historical and financial requirements:
- Establishment before February 29, 2020
- 25% drop in gross earned revenue over a quarter in 2020, compared to the same quarter in 2019
- At least 70% of revenue from sales-related live events — including merchandise, food and beverages
- Operates or intends to resume business as usual after restrictions are lifted
- Doesn't issue securities listed on national security exchange
- Didn't receive more than 10% of gross revenue from federal funding in 2019
- Wasn't awarded a Paycheck Protection Program (PPP) loan
- Doesn't make more than a trivial amount of income from sales or services that are excessively sexual
If your business was awarded disaster assistance through the Stafford Act, it doesn't count against your eligibility for this program. Eligible businesses or organizations owned by a state or a political subdivision of a state can only include the business or organization.
While this grant program isn't as strict as the Paycheck Protection Program, your business must have no more than two of the following characteristics to qualify:
- Owns an eligible business in more than one country
- Owns an eligible business in more than 10 states
- Employed more than 500 employees as of February 29, 2020
Performance space requirements
Eligible performance spaces are limited to those that:
- Have a defined performance and audience space
- Use mixing equipment, a public address system and a light rig
- Sell paid tickets or cover charges to most events
- Pay artists fairly — not for tips — with the exception of fundraisers and charity events
- Any nonprofit venue events are produced and managed mainly by paid employees
- Market performances in print or through social media
The space must also have at least one person filling two or more specific roles, though they don't necessarily need to be paid employees:
- Sound engineer
- Stage manager
- Security personnel
- Box office manager
If you're a promoter, you must work with a venue that meets these requirements. And if you're a talent representative, the artists you represent must perform in a venue that meets these criteria.
Special requirements for cinemas
Movie theaters have their own set of requirements to qualify for this grant program:
- At least one auditorium that includes a screen and fixed audience seating
- Projection booth or space with at least one projector
- Charge for tickets to see films
- Market showtimes in print, online, by mass mail or through social media
Special requirements for museums
Museums must meet stated criteria to be eligible for the grant program:
- Primarily operates as a museum
- Registered as a nonprofit
- Indoor exhibits affected by restrictions on gatherings
- At least one space with fixed audience seating and regular programming
How to calculate your grant amount
Grants are capped at $10 million, and how much you can receive depends on your revenue and when your business opened.
- Business open before January 1, 2019: 45% of gross earned revenue in 2019
- Businesses open after January 1, 2019: Six times the average monthly gross revenue in 2019
How can I use my grant?
You can use your grant for eligible expenses you business faced or is facing between March 1, 2020, and June 30, 2022:
- Payroll costs
- Scheduled mortgage payments, not including prepayments
- Scheduled payments on debts taken out before February 15, 2020, not including prepayments
- Worker protection to meet COVID-19 safety guidelines
- Payments of up to $100,000 to independent contractors
- Maintenance expenses
- Administrative costs, including fees and licensing expenses
- State and local taxes and fees
- Operating leases signed before February 15, 2020
- Insurance payments
- Production transportation
- Capital expenditures related to a live performance or exhibit
You can't use the funds to buy real estate, pay off loans issued after February 15, 2020, invest or lend out funds or contribute to political causes. And you can't primarily use the funds on capital expenditures related to putting on a show or exhibit.
Generally, you have 18 months to use the funds. After that point, you must return any unused amount.
While you don't have to submit any documents after applying, there's a chance you could be audited to make sure your company or organization spent the awarded funds appropriately. Plan to keep employment records for four years after receiving the grant and all other records for three years.
You may be eligible for additional funding if your business hasn't recovered by spring 2021. If your business is still making less than 30% of its 2019 revenue during the first quarter of 2021, you could be eligible for more help.
Generally supplemental grants are capped at 50% of your initial grant. And the sum of both grants is capped at $10 million.
Need funding fast? Apply for an online business loan
If you can't wait for a grant, compare business loan providers today. But make sure you need to take one out, first.
This new grant program is meant to help venues that are financially affected by state-mandated shutdowns and social distancing guidelines. Read our guide to grants for businesses affected by COVID-19 to learn about more options.
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