The SVOG Slog: Venue Aid Trickles Out As SBA Grant Processing Lags

To say they’re not happy is an understatement. Of the 14,020 total applications submitted to the SBA by press time, about 5,000 came from Tier 1 applicants – those who lost 90% or more of their 2019 income as a result of the COVID-19 pandemic and are in the most dire need. And of those, the SBA reported only 90 have been awarded grants, while 4,661 remain “in review.” 

“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,” Audrey Fix Schaefer, on behalf of the National Independent Venue Association, said June 9. “The SBA’s delay is actually driving more of our small businesses under – all while $16 billion in emergency funding waits to be administered.”

NIVA and the National Independent Talent Organization put Congress on blast as the end of the SBA’s projected two-week processing period for Tier 1 applications waned with little for the agency to show.

“Sadly, the help Congress secured for us by enacting the Shuttered Venue Operator Grant (SVOG) program has yet to arrive,” the two advocacy groups wrote to Congress. “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.”

With a reported 400 SBA staff on hand to process applications, it’s inexplicable to Bandit Lites founder Michael Strickland that Tier 1 awards notifications haven’t been completed. “With 400 people working on it, at 32.5 hours a day, they should be able to clear those in a week,” Strickland told Pollstar. 

Strickland stresses that June 9 was not a hard deadline for applications to be processed, but represented the end of a two-week period in which the SBA would process only the most-desperately needed, Tier 1 grant awards. After that, it was to begin work on Tier 2 applicants as well. But with the obvious backlog, there are roadblocks that need to be cleared in order to expedite cash.

The biggest such roadblock appears to be the IRS Form 4506-T, the tax return transcript request, that all federal grant applicants – not just those seeking the SVOG – must file in order to be considered for grants. The IRS form is sent to the SBA, which manually compares the tax return information with the grant application and it must match exactly. 

“The IRS is trying to hire people to process 4506-Ts,” Strickland said. “There is a 30- to 60-day backlog and nothing can be done about that.” The best solution, he says, would be for the SBA to process grant awards without waiting on the IRS. 

“The SBA needs to get blown up, not Congress. It’s truly the SBA, and what they need to do is not let the 4506-T hold up the grants,” he added.

Not all grants have been held up. While two recipients were the subject of press conferences extolling SVOG legislation along with Sens. Chuck Schumer and Richard Blumenthal, at least one promoter successfully received his grant award and first cash distribution. Tyrus Joseforsky, the owner of Flight Levelz Entertainment in Hobart, Ind., didn’t have a senator personally representing him to the SBA. In fact, his local SBA office was as surprised as he was when it learned he was an early awardee. He tells Pollstar the first disbursement, for 20% of the total grant, was deposited to his bank account June 4.

“The Indiana branch of the SBA reached out to me saying, ‘We’d heard you are the only one.’ The local branches are just as confused as the rest of us,” Joseforsky said. “I wasn’t even planning on getting that money. I was treating it as a lost cause. I’m grateful for the passage of this bill; for once it’s something for the little guy and it will benefit a lot of people when it comes.” 

But for the vast majority of applicants, it’s not coming soon enough. 

“We are past our breaking point,” NIVA and NITO wrote. “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 …” s