Since nearly 20% of all Shuttered Venue Operator Grant (SVOG) applications have been denied, this week the Small Business Administration (SBA) invited those more than 3,000 business owners to appeal their denials and restate their cases for receiving up to $10 million in federal support.
Declined applicants will have two weeks to appeal, during which time funding will be preserved.
As of Friday (Aug. 6), more than 10,700 applicants have been awarded grants amounting to roughly $8.3 billion of the program’s total $16.25 billion in available grants. The remaining roughly $8 billion will be allotted first to successful appeals and then as supplemental grants for venues, promoters, agencies and other live music companies with successful applications.
Since appeal notices began rolling out Monday, 494 invitations have been accepted so far. Those entities will need to review the SVOG Eligibility Matrix to see where they believe errors were made on the behalf of an SBA reviewer. The SBA has not provided specific reasons why each entity was declined, leaving the guesswork up to the companies.
“There is a balancing act we have to do. The level of specificity slows things down,” The SBA’s senior advisor for COVID-19 programs Deidra Henry-Spires told Billboard at the end of July. “There are conversations we can have after we’ve seen the whole unit of declines once we’ve gotten through [all the applications that came in the first 60 days]. But often in grant programs, you don’t get a personalized reason for your declination.”
The SVOG is a first-of-its-kind program for the SBA and there are a number of reasons why a venue or live music business could be found ineligible. The eligibility matrix alone is 11 pages, and some definitions, such as that for “live performers,” can be unclear. The lack of specific reasons for declinations led to frustration from many SVOG applicants, but as of today only 494 of the 3,142 invitations to appeal have been accepted.
Those who have accepted will need to upload a signed statement indicating their grounds for appeal, as well as any supporting documents. There will be no secondary appeals process for applicants whose appeals are declined, which means the next two weeks mark several venues’ final chance to receive much-needed funding. The Shuttered Venue Operators Grant was signed into law on Dec. 27 and struggling businesses had to wait another four months before a single application was accepted.
“The only way we’ll ever get our doors back open is by getting this grant,” co-owner of the Music Room in Atlanta Mike LeSage told Billboard. “If we don’t know what the problem is, are we just going to submit something with the same issues? It’s scary when your entire livelihood and your family’s livelihood are wrapped up in this.”
Declinations make up a fifth of all grant applications, which will officially close on Aug. 20. The high rate of declines can be attributed to the complexity of a grant written for an assortment of businesses like music venues, promoters, talent agencies, performing arts venues, zoos, museums and movie theaters. Several entities told Billboard they believe confusing tax codes for their local government confused SBA reviewers and others say there was confusion over who was eligible. The SBA “anticipates reversals of prior decisions will be rare,” according to the SVOG website.
The SBA will assign a new reviewer to go over each appeal “to see if we made a mistake, if something else should have been done or you should have received an award,” the website exaplins. The SBA’s Henry-Spires added, it’s a “second opportunity to plead your case with strong financial documentation that makes a good case for the American taxpayer, because we take our duty to protecting their funds incredibly, incredibly, seriously.”
On Friday, the SBA also began to send out invitations for “reconsideration” or for those who believe they received less funding than they deserved. Just over 200 applicants were sent reconsiderations emails so far with 11 accepting. The reconsideration window will also last two weeks.