SBA Rejects 30% of Venue Relief Applicants

by | Dec 30, 2021 | Industry, Stories | 0 comments

The U.S. Small Business Association (SBA), which is in charge of a program providing COVID-19 relief to shuttered venues, has rejected 30% of its applicants. This move has left billions of dollars sitting in the fund.

Called the Shuttered Venue Operators Grant (SVOG), the program was established by Congress in December 2020 to help struggling venues. $16 billion in aid was set aside for the program. Clubs and music venues were eligible for grants amounting to 45% of their gross earned revenue over the course of 2020, based on the previous year’s receipts.

The SVOG, presided over by the SBA, almost immediately ran into problems. It was approved on December 27th, 2020 but didn’t go into action until April 8th because a new website had to be made for it from scratch.

When it finally went live, the website crashed within four hours due to an overwhelming number of applicants. At one point, a bug in the application system led to club owners wrongfully being declared dead. In August, applications were closed to help the SBA deal with the massive backlog.

5 Magazine notes that as of December 20th, 17,644 venues applied to SVOG. $10.6 billion in grants were given out and an additional $3 billion in “supplemental” grants were awarded to 8,538 applicants, adding up to a total of $13.6 billion awarded. That leaves around $2.65 billion still sitting in the fund a year after the program went into effect.

It turns out that almost 5,000 applicants – 30% of all applicants – were denied. Many were allegedly not given any explanation why.

Spin, a nightclub in San Diego, was allegedly denied twice without comment, prompting them to sue the SBA. A local San Diego venue supporting local and international DJs and musicians, Spin “demonstrated its eligibility for an SVOG award in its application to the SBA,” their lawsuit argues. They submitted ample proof of their losses including rent checks, sample contracts, and receipts.

On October 5th, 2021, due to intervention from a U.S. District Court, the SBA reversed their decision and awarded Spin $644,541.11. The club still awaits a decision on supplemental funds.

Recent Articles