SBA rejects requests for assistance from eligible concert venues

in December, Congress has approved a $16 billion Shuttered Venue Operators Grant Program to provide a financial lifeline to live performance and event venues, event promoters, movie theaters, museums and talent actors decimated by the Covid-19 pandemic. But the owners of the entertainment companies told The Intercept that the Small Business Administration, the agency tasked with administering the program, has completely disqualified many companies that should qualify without any explanation.

Initially, the SVOG . program was Having technical problems This delayed his ability to accept applications for months. In June, two months after they started accepting applications, I just released a 31 scholarships. But now the money seems to be flowing: as of September, it has been released more than 12000 Grant. Instead, the problem at the moment is that many companies are being prevented from receiving funds.

As of September 27, the Small Business Administration has denied Nearly 30 percent From SVOG Apps. Compare that to the Paycheck Protection Program — a $953 billion fund to help companies cover payroll and other expenses during the pandemic — which has been approved 97 percent of orders as of May. While companies can appeal the Small Business Administration’s decision, the agency does not tell them why they were refused, so they are left to guesswork based on complex and inconsistent criteria.

And unlike the Restaurant Revitalization Fund he had Dispersed In all of its $28.6 billion in funding as of June, the SBA has awarded only $11 billion of the total $16 billion as of September 27, so there’s still money left to be given to more companies.

Andrew Priebel, owner of the New Orleans-based escape room company Escape My Room, said the SBA “has created winners and losers in the same industry because of the arbitrariness of awards.” He is refused, however he knows that the escape room is only blocks away from his grant money.

The SBA has created winners and losers in the same industry due to the arbitrariness of the awards.

At least one lawsuit has been filed against the SBA due to the denials. Kaos Productions — which operates Spin Nightclub in San Diego, a live entertainment venue for on-stage performances by musicians, DJs, bands and solo artists — was rejected on both initial application and appeal despite showing that it met eligibility criteria for live venues, including Provide a letter from the San Diego Police Department outlining his permit to operate as a live music-only venue and a letter from a local live-stream competitor endorsing its eligibility, according to the lawsuit she filed. “Spin needs the SVOG award for the exact reason Congress created the SVOG program: to help eligible live entertainment companies like Spin recover from the major setbacks they’ve experienced due to the pandemic,” the lawsuit says.

Colors Worldwide Inc. L.A., which promotes live onstage performances by DJs and R&B hosts in Los Angeles, similarly on both the initial application and appeal, although a letter from its CPA verifying that its primary business is direct promotion of the venue was included, according to the lawsuit. discrete. The Small Business Administration declined to comment on the pending lawsuits.

The SVOG program was created specifically to help venues that have been closed due to public health needs during the pandemic, and eligibility is strictly limited to venues for live performances, cinemas, and indoor museums. However, some of the SVOG award recipients include outdoor activities and spaces, such as a 5K “margarita madness” race in California, a hill-crossing memorial in Illinois, a golf tournament in Oregon, as well as strip club, despite the eligibility of the program Removal “Live performances of a sexually critical nature.”

“The SVOG indicative platform is complex and includes 83 criteria for eligibility, which vary by entity type. The Small Business Administration determines eligibility based on these criteria,” Andrea Roebaker, a spokeswoman for the SBA, said in an email.

“Because the SVOG program is emergency relief and the Small Business Administration wants to ensure that all eligibles actually receive funding, SVOG applicants have been given the opportunity to correct errors and/or provide additional information to the SBA through the Technical Corrections process, which has been published SBA more than 9,000 times to support SVOG applicants,” said Roebker.

She noted that the Small Business Administration published “eligibility matrix“For business owners to understand why they were denied and hold ‘several’ business hours and information sessions about the appeals process. All applicants who were denied in their initial application can appeal the decision, which she said is “rare for the Federal Grant Program.”

It did not respond to a request about the number of denials that were set aside on appeal, saying, “At this point, the SBA has made very few final decisions on appeals.” On September 3, the Small Business Administration sent an email telling applicants that their appeals had already denied that the agency would conduct a “more thorough evaluation” of all appeals, according to an email shared with The Intercept.

Business owners owe What they say is the opacity of the denial. The agency refuses to tell them why a particular request was denied, leaving owners feeling like they’re shooting in the dark on appeal. “It’s very difficult to have a successful appeal if you don’t know why you were rejected in the first place,” said Prebel, the escape room owner.

Priebel thinks the problem is that the small business agency found itself trying to think of what counts as art and entertainment. Preble knows that his field of work is new but, he argues, is live entertainment, not much different from a play. He says he met all the criteria for a live venue, including the actors performing the shows, lighting and sound systems, and staff taking care of ticket sales, marketing, and security. By a random stroke of luck, he says, he called his SBA office and reached out to someone who was willing to read the notes on his application as to why he was refused. “They said that even though we hired actors, it wasn’t considered a performance,” he said. “It’s arbitrary to decide only what is performance and what is not.”

“It’s arbitrary to decide only what is performance and what is not.”

Preble’s business was booming before early 2020; Almost every year since 2014, a new location or experience has been opened. But he has yet to turn a profit during the pandemic. Not only does the escape room require people to be indoors together, but the vast majority of his business also comes from tourists, many of whom have stopped traveling to New Orleans. It reopened its doors in the summer of 2020, but was only serving 15-20 percent of regular customers. Business rebounded earlier this summer but faltered as a variable delta rise and Hurricane Ida hit the area. Meanwhile, costs have increased to keep rooms clean and keep groups of customers away. “We’ve been incredibly close to bankruptcy this whole time,” he said.

Pribel eagerly followed the debate in Congress over whether and how to provide funding for live venues. He said that when the SVOG program was passed in December, “it was a huge relief.” The money would have allowed him to pay off the debts he incurred, including back rent and other fixed expenses he could not meet, and to keep his business going.

“It looks like we’re going to get help, and staying open would make sense,” he said. But had he known he wasn’t going to get any of the grant money, he might have decided to stay closed for the past months and save his resources when the world was back to normal. Without SVOG’s money, he’s not sure he can pay off all of his loans or even keep in business for a very long time.

Shamrock Productions Chris Navratil, vice president, said a family business that produces consumer trade shows in Farmington, Minnesota, has been “crushed by the pandemic.” Every show has been canceled since February 2020, which means the business hasn’t generated any revenue. “I haven’t slept since March 2020,” she said. Shamrock’s first pandemic presentation is scheduled for December, but Navratil isn’t sure if it will actually happen.

So I took the opportunity to apply for SVOG funds. She applied as a live venue promoter because her work takes care of everything to his events, including renting facilities, buying ads, and bringing in live entertainment like singing shows. She spent two weeks putting her application together only to be rejected with no idea why. I submitted the application on August 5 and received the rejection on August 12. I sent an appeal on August 24 and haven’t heard back yet. She tried contacting the SBA to find out why she refused, but they refused to answer her questions.

Navratil knows other companies like her who received mixed messages when they called their representatives in Congress – some said yes, companies like her qualified for the money, while others said no. “In Washington, there wasn’t even a group, for whom this program is and for whom it is not,” she said, with apparent anger. “It’s all on the board, there’s no rhyme or reason.” She said that some companies like her got paid, while others like her were denied.

When I asked what it would mean if her denial was not overturned, she paused for a long time and sighed. “That means we’re going to have a lot of sleepless nights,” she said.

“We did our part, we closed our doors, and our business was damaged,” she added. “Quite frankly, the government has an obligation to help us survive.”

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