Is the SBG Grant Legit? What You Need to Know

The “SBG Grant” is an informal reference to a legitimate federal program known as the Shutter Venue Operators Grant (SVOG). This program provided substantial financial assistance to specific industries severely impacted by the COVID-19 pandemic. Administered by the U.S. Small Business Administration (SBA), the SVOG aimed to support the continued operations of businesses and organizations that primarily rely on live audiences and in-person events. The grant program helped many entities within the arts, entertainment, and cultural sectors navigate challenging economic conditions.

Understanding the Shutter Venue Operators Grant (SVOG)

The Shutter Venue Operators Grant (SVOG) was a federal initiative designed to provide emergency assistance to a targeted segment of the economy. Established under federal legislation in December 2020, the program allocated over $16 billion in funding. The SBA administered these grants, focusing on businesses that experienced significant revenue losses due to pandemic-related closures and restrictions.

The primary objective of the SVOG was to support eligible entities, including:

• Live venue operators
• Theatrical producers
• Live performing arts organization operators
• Museum operators
• Motion picture theater operators
• Talent representatives

These entities were among the most severely affected by the pandemic, often facing prolonged shutdowns. The funds were intended to help cover essential operational expenses, allowing these businesses to remain viable.

Eligibility Criteria

To qualify for the Shutter Venue Operators Grant, applicants needed to meet specific criteria. A fundamental requirement was that the entity must have been fully operational as of February 29, 2020. Applicants also had to demonstrate a gross earned revenue reduction of at least 25% when comparing any calendar quarter in 2020 to the corresponding quarter in 2019. The program included provisions for entities that began operations after January 1, 2019, allowing them to qualify based on average monthly gross earned revenue.

Entities were ineligible if they were publicly traded or majority-owned by a publicly traded corporation. Businesses that derived more than 10% of their 2019 gross revenue from federal funding, excluding disaster assistance, were generally excluded. Businesses that presented live performances or sold products of a prurient sexual nature were also prohibited from receiving grants.

An entity was ineligible if it owned or operated venues, museums, motion picture theaters, or talent agencies in more than one country, in more than ten states, AND had more than 500 employees as of February 29, 2020. A maximum of five business entities related to the same group could receive a grant, with each subsidiary generally needing to meet the eligibility requirements independently. Applicants also had to certify that economic uncertainty made the grant necessary for their ongoing operations.

Entities that had received a Paycheck Protection Program (PPP) loan on or after December 27, 2020, were still eligible for an SVOG, but the SVOG amount would be reduced by the PPP loan amount. A portion of the SVOG funding, specifically $2 billion, was reserved for eligible applicants with 50 or fewer full-time equivalent employees, prioritizing smaller operations.

Application Procedures

The application process for the Shutter Venue Operators Grant was managed through a dedicated online portal established by the SBA. Prospective grantees were advised to obtain a Dun & Bradstreet (DUNS) number, a prerequisite for registering with the System for Award Management (SAM.gov). SAM.gov registration was mandatory for all federal grant applicants, requiring organizational information to match precisely across all platforms to avoid delays.

Once registered, applicants completed the online application form, which required detailed financial and operational information. Essential documentation for submission included:

• Financial statements
• Tax returns
• Payroll records to substantiate revenue loss and employee counts
• Operating agreements, contracts, and floor plans (depending on entity type)

Applicants were responsible for monitoring their application status through the portal and responding promptly to any requests from the SBA for additional information or clarification. The review process involved an assessment of eligibility, the extent of revenue loss, and the accuracy of submitted documentation. Grant funds were designated for specific eligible expenses, including:

• Payroll costs
• Rent and utility payments
• Scheduled mortgage or debt payments incurred before February 15, 2020
• Worker protection expenditures
• Payments to independent contractors up to $100,000 in annual compensation
• Other ordinary business expenses like maintenance, administrative costs, and state and local taxes

Funds could not be used for:

• Buying real estate
• Payments on loans originated after February 15, 2020
• Investments
• Political contributions or any other uses prohibited by the SBA Administrator

Grantees were required to maintain meticulous records, retaining employment records for four years and all other relevant documentation for three years following the receipt of the grant funds, to ensure compliance and facilitate potential audits.

Identifying Legitimate Sources and Avoiding Fraud

To ensure the legitimacy of information regarding the Shutter Venue Operators Grant, it was important to rely exclusively on official government sources. The U.S. Small Business Administration (SBA) website, SBA.gov, and Grants.gov were the primary authoritative platforms for all program details, eligibility requirements, and application procedures. Any communication pertaining to federal grants should originate from official government email addresses, typically ending in “.gov,” and direct users to secure, official government websites for sensitive actions.

Grant scams often exhibit several warning signs. A common red flag is an unsolicited offer of a grant. Another indicator of a scam is any request for upfront fees, processing fees, or taxes to receive a grant, as genuine government grants do not require payment from recipients before funds are disbursed.

Scammers may also pressure individuals to act immediately, threaten the loss of a grant if information is not provided quickly, or ask for personal financial details like bank account numbers or Social Security numbers outside of a secure application portal. Communications containing misspellings, grammatical errors, or an unprofessional tone should raise suspicion. If any communication or offer seems suspicious, it is advisable to verify its authenticity with official sources. Suspected grant fraud can be reported to authorities such as the SBA Office of Inspector General or the Federal Trade Commission.