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Indie Venues Send Distress Signal to Congress as $16 Billion in ‘Save Our Stages’ Relief Money Remains Tied up by SBA

Small Venue Operators Grant/ SBA
Courtesy Small Business Administration

UPDATED: Nearly six months after Congress passed the $16 billion Save Our Stages act into law, less than 100 of the nearly 5,000 struggling independent venues have been approved for relief money, according to a report released Wednesday (June 9) by the Small Business Administration, which distributes the loans — and just “a few” have actually received any funds.

This stunning state of affairs stands in bold contrast to the initial PPP and the more recent restaurant relief funds, which were on their way to businesses within days.

The SBA announced late last month with fanfare that it had “[begun] reviewing the [Small Venue Operators Grant] applications upon receipt and it is expected SVOG Priority 1 (90% revenue loss) applicants will receive notice of awards this month and disbursement by the end of May if they respond in a timely manner to the notice of award” — the same day that its new chief Isabella Guzman was grilled by Congresspeople about the inexplicably slow approval approval process for venues.

Yet as of last week, the SBA had approved just 50 venues, and according to new numbers released Wednesday by the SBA, that number rose in the past week — to 90. The National Independent Venues Association reports that just “a few” venues have actually received those funds.

In a statement on Thursday, a rep for the SBA told Variety via email: “The SBA has provided hundreds of billions of dollars in economic relief to America’s small businesses empowering them to build back better and create an economic resurgence in communities everywhere. The Shuttered Venue Operators Grant program has awarded nearly $128 million to date.

“We have dedicated team of hundreds of reviewers working around the clock to process, approve and disburse funds as quickly as possible to get the nation’s venues back on track. In large part because of statutory requirements – created in the last Administration – the applications require extensive scrutiny. To further shed some light, applicants have included anywhere from 30 to 100 documents in their applications to ensure they met the statute’s guidelines and each needs review before moving on in the grant award process.

“The SBA realizes the critical need to increase processing speed for Shuttered Venues applicants – the current pace of awards is not reflective of the high standards that we strive to meet. We are committed to doing everything we can to improve funding speed, get Americans the relief they desperately need and open our venues again.”

It took eight months of intense lobbying to pass Save Our Stages  — which was authored by Senators Amy Klobuchar and John Cornyn and sponsored by Senate Majority Leader Chuck Schumer and dozens of Congresspeople — then another four months for the Small Business Administration to launch its Shuttered Venues Operators Grant website, through which venues must apply for federal aid. It immediately crashed, and was relaunched two and a half weeks later, after dozens of members of Congress, particularly those who sponsored or supported Save Our Stages, called for a quick reopening. When the site finally opened, it received more than 17,000 applications in the first 24 hours.

On top of the website malfunctions and the inexplicable slowness of review process, the SBA’s response to the venues at times has been a black comedy of errors: Earlier this month, multiple venue operators received notices from the SBA that they were deceased (most of them were not).

The delay in relief funding has caused immeasurable problems for independent venues and theaters and has ironically aided large live-entertainment companies like Live Nation and AEG: Even with states opening back up, independent venues do not have the funding to secure talent or re-hire their staffs, festival promoters aren’t able to secure fields to hold their events, and the ecosystem around much of the live industry remains stalled — five and a half months after Save Our Stages was passed into law; PPP and the newly launched Restaurant Relief Fund were distributing millions of dollars within days.

NIVA, members of which have been struggling through the pandemic for nearly 16 months, sent the following letter to Congress on Wednesday (June 9), which appears below in full.

Sadly, the help Congress secured for us by enacting the Shuttered Venue Operator Grant (SVOG) program has yet to arrive. While the rest of the country begins reopening, our businesses cannot reopen – not because of COVID-19 – but because we are still waiting on emergency relief from the SBA to provide us with working capital to hire back employees, pay back rent, put deposits on bands and productions, order food and beverage to serve patrons, among other necessary costs of reopening.

BY THE NUMBERS

  • 165 days (5 ½ months) after enactment of the law and 45 days (1 ½ months) after the SVOG application portal opened (the second time, after the failed launch on April 8) fewer than 100 grant applications have been approved.
  • Today marks the last day of the 14-day Priority 1 period in which the Small Business Administration (SBA) was supposed to process allapplications for applicants experiencing greater than 90 percent revenue loss. There are nearly 5,000 such applications and SBA has only communicated that 50 applications have been processed.
  • The SBA hired 500 reviewers for the SVOG program with funds appropriated by Congress.  If each analyzed just one application a day, 17,000 applications would have been processed by now.  But yet, the SBA has processed fewer than 100 applications in the six weeks since the application portal opened.
  • More than 4,950 small business owners in the first priority period, those with the greatest need, and an additional 10,000 small businesses that fall into the second and third priority periodsare still waiting for emergency relief funding. They are scared, frustrated, angry, exhausted, feeling abused, and wondering if desperately needed help will ever arrive.

TIMELINE OF EVENTS

  • December 27, 2020: SVOG program enacted into law.
  • March 22, 2021: Isabella Casillas Guzman sworn in as SBA Adminstrator.
  • April 8, 2021:  SVOG application portal opens, crashes and is closed.
  • April 26, 2021:  SVOG application portal reopens successfully.
  • May 4, 2021: The SBA reports it “began reviewing the SVOG applications upon receipt and it is expected SVOG Priority 1 (90% revenue loss) applicants will receive notice of awards this month and disbursement by the end of May if they respond in a timely manner to the notice of award.” This did not happen.
  • May 26, 2021: Administrator Guzman testified before the House and Senate Small Business Committees that SVOG grants have started, and while it would be slow at first but there would be a ramp up. This did not happen.
  • June 3, 2021:SBA reported just 50 award notices (very few of which have actually received emergency relief funds) had been issued. Since then, there has been no update on the number of applicants receiving award notices despite SBA promising stakeholders and Congress that updates would be provided daily.
  • June 9, 2021: The last day of the 14-day Priority 1 period in which SBA was supposed to process allapplications for applicants experiencing greater than 90 percent revenue loss. There are nearly 5,000 such applications and SBA has only communicated that 50 applications have been processed.

IMPACT OF DELAY

We are past our breaking point. We can’t hang on any longer. We want to participate in America’s economic recovery, but our venues can’t afford to re-open our businesses. We have no funds left – many of us have exhausted our PPP loans, our EIDL loans and whatever assistance we’ve been able to garner at the State and Local levels. We don’t have the capital to restock food and drinks for the customers we hope to welcome back or make offers on shows. We are losing professional staff to well-capitalized, larger corporate competitors. We are losing longtime wait staff because we can’t compete with the wages offered by bars and restaurants who received support via the quickly administered Restaurant Revitalization Fund.

The SBA, whose sole purpose is to help small businesses, is demonstrating a lack of urgency and ability to execute this desperately needed emergency relief program. The SBA’s delay is actually driving more of our small businesses under – all while the $16 billion in emergency funding waits to be administered.

We come to you once more to ask that you reach out to the White House and SBA to urge them to do whatever possible to get this funding into the hands of small businesses owners to Save Our Stages.