Photo Credit: John Matychuk
Hundreds of venues that received pandemic relief through the Shuttered Venue Operators Grant (SVOG) program are now facing unexpected demands from the Small Business Administration (SBA) to return those COVID relief funds.
These letters were issued without prior warning and inform the recipient that the SBA has determined their grant was either awarded in error or excess of eligibility. The letter informs venues that repayment of the funds is requirement—now several years after the funds were received and spent.
The SVOG program was established in late 2020 and expanded in 2021, distributing more than $16 billion to independent theaters, venues, promoters, and talent representatives impacted by COVID shutdowns. Applicants underwent a rigorous vetting process, submitting past tax records, programming histories, lease documents, and payroll records to prove their eligibility. For many, the SVOG grant was a lifeline during total shutdowns.
Yet years later, the rules appear to be shifting. Venues that received a SVOG grant are now receiving letters saying previous documentation was insufficient or that the business never qualified in the first place. The full text of the rescission letter is blunt and light on details. Here’s a quick example of what venue owners are receiving in the mail:
“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. 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 letter notes that repayment of the debt must be made in full within 30 days or recipients run the risk of penalties, interest, and administrative charges. The repayment plan appears to be a three-year installment plan that must be chosen within 30 days of receiving the letter. Venue owners who receive a letter are encouraged to act immediately, either to request reconsideration or activate the repayment plan.
They’re also recommended to preserve all correspondence with the SBA, maintain a complete copy of the original application, and consult with industry advisors who assisted during the application process. In extreme cases, legal counsel experienced in federal guidance may provide essential guidance, especially if documentation was previously approved of a venue’s eligibility is being questioned retroactively.
In some instances, public records highlighted how much celebrity-owned entities received from the SBA through the grant program. An investigation into SVOG grant funds conducted by Business Insider found that artists including Lil Wayne and Chris Brown spent millions to cover their luxury spending. Lil Wayne purchased private jet flights, clothes, and accessories. Chris Brown spent $10 million on his CBE Touring company, with $5.1 million ending up in his own pockets. DJ Marshmello was awarded a $9.9 million grant to pay himself for 2020, based on his 2019 earnings.
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This post was originally authored and published by Ashley King Digital Music News via RSS Feed. Join today to get your news feed on Nationwide Report®.
