If your company is in the arts world and needs financial help — and who doesn’t? — it’s possible that a Paycheck Protection Program loan may not be your best option. Instead, you should probably look into a program with an ungainly name: the Shuttered Venue Operator Grant Program.
Thanks to the stimulus bill passed at the end of 2020, the Small Business Administration has put aside $15 billion targeted to help profit-making and nonprofit enterprises in the arts, specifically people who put on concerts and shows, book acts and represent artists, as well other businesspeople in the fields of theater, museums, the performing arts, zoos and aquariums, and movie houses, among others.
Here’s the most important thing: The $15 billion is not for loans. It’s for grants. So the money doesn’t have to be paid back, as long as the rules are followed.
To be eligible, you would have to show that your enterprise suffered a 25% decline in revenues between April and December of last year because of COVID-19.
Small businesses get priority: $2 billion has been reserved for those with fewer than 50 full-time employees. The program hasn’t opened yet, but will do so shortly. When it does, the first round of money will go to those with the steepest revenue declines.
There’s a lot of money available.
If your business was in operation on Jan. 1, 2019, you can get a grant equal to 45% of the revenue during that year. If your business is newer than that, you can get your average monthly revenue in 2019, multiplied by six. However, the program is limited to businesses that started before Feb. 29 of last year.
The top initial grant is $10 million. However, refresher grants equal to 50% of the prior grant will also be available. So some could receive as much as $15 million.
How important is this for Philadelphia’s arts community? Very, considering the dramatic impact that the pandemic had on this industry.
“For many Philadelphia theaters who have buildings, the grant program is very important to offset the costs of having a building during this time when they cannot be used, but still require mortgage, utilities, etc.,” says LaNeshe Miller-White, executive director of Theatre Philadelphia, a nonprofit advocacy group.
Miller-White also points out that since grant recipients can dip into the money for payroll, as well as to pay independent contractors, firms will “hopefully see theater workers reaping the benefits as well and seeing more work.”
Christopher Collier, executive director of Renew Theaters, a nonprofit that currently operates four movie theaters in Pennsylvania and New Jersey, agrees.
“This grant would make an incredible difference toward the future sustainability for our venues,” he says. “The funding would give us the resources to not only replenish our losses from being closed for nearly a year, but also provide us the safety net needed to get through 2021.”
There are some rules. While the money can go to rent, payroll, mortgages and older loans, among other allowable expenses, it can’t be used to buy real estate, make investments, or pay pre-pandemic loans.
“These funds would first and foremost allow us to rehire and provide support to our staff,” Collier says. “We will also use the funds to pay rent, taxes, and other operations expenses that have continued to pile up, even while we have been closed.”
As welcome as the grants may be, they still may not help all those in the arts who need money.
Based on the current rules, it appears that individual actors, technicians, and other contractors ― although eligible to receive payments from companies that employ them — won’t be eligible for direct payments. The program is also barred to theater owners who received a loans in the last go-round for those.
For those that are eligible, the money could not be coming at a better time. Collier says his movie houses, closed since early 2020, saw income drop by three quarters last year. Without the help of members and patrons, almost no money would have com in.
Which is why he plans to apply for this program as soon as he shows his first movie this year.
“We are still waiting on the final details of the grant and the application portal to open,” he says. “We have been busy, however, compiling as much information we can so that we are ready when that happens.”
Gene Marks is a certified public accountant and the owner of the Marks Group, a technology and financial management consulting firm in Bala Cynwyd.