SVOG Rescission Letters Hit Mailboxes: What To Do If You Get One

Last week, the Small Business Administration began sending letters to some recipients of Shuttered Venue Operators Grant — the $16.25 billion program that kept many venues and other live businesses afloat during the pandemic — demanding repayment.

Bandit Lites founder Michael Strickland, who was one of the driving forces that pushed for the legislation that created SVOG, said he’s heard from more than 200 business owners who have received the letter, which says the SBA has reviewed an award and determined that grants were awarded to ineligible recipients or in an amount in excess of eligibility. The letter, similar to other rescission and clawback letters sent by government agencies during the Trump Administration, is light on specifics. The letter has been received by businesses in all sectors of the industry.

Pollstar has reached out to the SBA for comment.

The letter says repayment must be made in full in 30 days, though it also offers options for appeal or the establishment of a three-year payment plan, but any action must be made within 30 days.

Strickland shared with Pollstar a letter advising anyone who has received the notice of their next steps:

As of June 23 the SBA began sending out SVOG recission notices. This was, for most people, sudden and without warning. This was 100% without any prior knowledge or notice. As of today, we do not know what triggered this, but it is real.

If you receive a notice from the SBA, you have 30 days to repay 100% of whatever funding you received. Most people are not in a position to repay the grant at all, let alone in 30 days. A number of people have reached out to me, and we are working on responses.

If you read the letter you received please focus on two passages.

First is this passage: “If you wish to contest the validity or amount of this debt, you may submit a request for reconsideration through the SVOG Portal within 30 calendar days from the date of this letter”.

Second is the passage that allows you 3 years to pay: “You also have the right to enter into a reasonable repayment agreement that is acceptable to the agency. Requests to pay for installments must be submitted through the SVOG Portal within 30 calendar days from the date of this letter.”

The summary is simple; you have 3 options as of today.

1. Pay the amount due within 30 days.
2. File a Request for Reconsideration.
3. Request to pay in installments of 3 years.

As each situation is different, there is no one size fits all answer. The SBA will deal with each case one at a time. Normally I would suggest reaching out to your Senator and Representative, but given the current legislative situation in Washington the likelihood of a reply is low. Every day you pass is a day closer to your 30-day limit. If you pass the 30 days you begin to collect penalties and interest and administrative charges. 

I have reached reach outs from promoters, managers, agents, venue owners and others so this is not a single group focus issue. I suggest you deal with this immediately for your own best interests.

If you believe you qualify for reconsideration you should file a request. I have several cases before me that 100% qualify for SVOG and it is a mystery as to why the recission was requested. If you believe you indeed do not qualify it may be in your best interest to file for the 3-year installment method should you be unable to pay a lump sum in 30 days.

Most people that have contacted me simply read the fact they owe a large amount of money in 30 days and never read the other 2 options.

I wish everyone best of luck with this but suggest you give this your utmost attention. Unlike during COVID when we did not know where the financial cliff was, this issue is 30 days from the receipt of your letter. This means each of you must take a quick, proactive stance on the issue now.