SBA March Madness and a Possible Congressional Fix Update 3/4/21

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March 4, 2021

Dear Arts Action Fund Member,

“March Madness” appears to be in full swing at the Small Business Administration (SBA). Updates below also include my latest guidance based on current available information and upcoming legislation.


** PPP or SVOG: The Congressional Fix **

In the current Senate version of the Reconciliation Bill for additional economic COVID relief (aka The Biden American Rescue Plan), the bill eliminates the rule that applicants to an SVOG cannot also receive a new PPP after December 27, 2020. The bill further provides that SBA can simply reduce the amount of an SVOG award by the amount of the 2021 PPP loan for a net SVOG award in order to avoid eligible entities from double dipping. Your concerns were heard! This is exactly what many of us have been lobbying for. The chances of this version of the bill being enacted into law by March 14th is very good. Please note that all current SVOG guidance in their latest FAQs and training videos will not reflect this legislative change until it is enacted into law.

Guidance: If you think you are eligible for PPP and SVOG, wait until the Congressional Fix above is enacted into law in mid-March before you apply for a PPP. But remember, the last day to apply for a PPP is March 31, 2021. This process will then clear the way for you to also apply for SVOG when that application portal opens in a few weeks. (Huge sigh of relief!)

** Highlights of Both Clarifying and Confusing Guidelines in Latest FAQs **

SBA is experiencing further technical and programmatic delays in rolling out the SVOG program. We’ve been informed by the SBA that the application portal may not open up until after March 31st. In the meantime, the SBA continues to both clarify and confuse potential applicants with evolving guidelines through their Frequently Asked Questions (FAQs), which were just updated on February 28, 2021.

  1. SBA has finally updated the SVOG chart of grants on their website to correctly reflect that Third Priority Grant losses of 25% will be based on “earned revenue.”
  2. For the First and Second Priority Grants, SBA has confirmed that eligibility will be based on minimum losses of 90% and 70% of gross revenue, respectively. However, there is still a possibility that certain revenue items, such as capital campaigns, could be exempted from the definition of “gross revenue.” Stay tuned. 
  3. For the $2 billion Small Business Set-Aside Grants (eligible entities with no more than 50 full-time employees), the legislation indicates that these grants are available to any eligible entity who has a minimum loss of at least 25% gross earned revenue between one quarter of 2019 and the corresponding quarter of 2020. However, the SVOG website does not reflect that. It merely says “revenue.” We know that these references may seem nuanced, but it makes an incredible difference with nonprofit entities and we continue to make that case with the SBA.
  4. Regarding the SVOG rule that no more than 10% of an eligible entity’s gross revenue can come from federal resources, SBA has made some good changes. Neither state/local governments nor public universities will be subject to this provision now.
  5. SBA confirmed that mobile touring facilities, such as traveling tent shows and festivals can qualify as a shuttered venue.
  6. Definition of an eligible “Performing Arts Organization Operator” has been defined as “any entity (including a theatrical management business) which meets the criteria established under the Economic Aid Act and whose principal business activity is to create, produce, perform, and/or present live performances for audiences in qualifying venues, including amphitheaters, concert halls, auditoriums, theatres, clubs, festivals, and schools.”

** SBA Newly Released Training Videos as of 3-3-21 **


The SBA reports that it has approved 2.2 million new PPP First and Second draw loans, totaling $156.2 billion. There is $128 billion in PPP funds still available through the March 31, 2021 deadline. SBA Associate Administrator Patrick Kelly stated today that he has confidence there will be enough funds through the end of the month to accommodate PPP loan requests from eligible businesses.

** Exclusive PPP Application Window Open until March 9, 2021 **

In order to provide enhanced equity in reaching the smallest businesses, the Biden Administration created a two-week window to only process PPP loan applications for businesses with fewer than 20 employees and for self-employed individuals (sole proprietors, gig workers, 1099s) from Wednesday, February 24 through Tuesday, March 9, 2021. This is an opportunity for these smaller PPP applications to jump to the head of the line for SBA processing through Tuesday, March 9th.  

GuidanceThis window of time simply represents the optimal time for this designated applicant pool to submit their PPP applications. All size eligible applicants, including small businesses with fewer than 20 employees and self-employed workers, can continue to apply for PPP loans from March 10 through the March 31, 2021 firm deadline.

** PPP Formula Changes Specifically to Help Self-Employed Workers **

The Biden Administration also announced four additional changes to prioritize the Paycheck Protection Program (PPP) to support as many underserved small businesses and self-employed workers as possible, effective 3-3-21. The first change detailed below is the real game-changer and only applies to self-employed individuals (sole proprietors, gig workers and 1099s) who have not been approved for a new (1st or 2nd draw) PPP loan yet in 2021. 

SBA will now allow eligible self-employed individuals (sole proprietors, gig workers, 1099s) to qualify for a larger PPP loan by revising the “payroll expenses” formula for these applicants only. Self-Employed applicants can now qualify by using their “Gross Income” on Line 7 of their Schedule C for either 2019 or 2020. This new PPP formula is more equitable to self-employed individuals and it will yield significantly more forgivable loan funds than ever before! SBA released late yesterday afternoon two new forms:

This is good news for those self-employed individuals who have not applied yet for a new PPP; however, it is shocking that the SBA is not allowing this new ruling to be retroactive to those self-employed individuals who already received their new PPP loan this year, according to page 7 of the SBA’s Interim Final Ruling yesterday. SBA has scheduled PPP Q&A webinars that you can sign up for through March 8th.

GuidanceHere are helpful tips for three different scenarios.

  • If you are a self-employed individual, who will not be pursuing an SVOG, now is the ideal time to submit your PPP application for a new First or Second draw forgivable loan no later than March 9. If you’re unable to apply right away, you can still do so later, but remember the final deadline for all PPP applicants is March 31.
  • If you are self-employed and have a PPP application “pending” with a lender for a new PPP loan, please contact them immediately and let them know that you need to update your numbers using the new PPP Schedule C application form and rules. Lenders will not do this automatically for you. Some lenders may say that you can’t modify your application but that you have to cancel it. If you cancel, you should be able to re-apply right away with the new form.
  • If you are self-employed and already received your new PPP loan this year, please contact your Members of Congress, the White House, and the SBA to ask them to correct this injustice of not allowing a retroactive change. All parties are aware of the problem and your voice will help secure our next “congressional fix!” Tell them the difference it would make in your allowable loan. (Example: 2019 Net profits divided by 12, then multiply by 2.5, compared to 2019 Gross Income divided by 12, then multiply by 2.5)

Additional Guidance: Please remember that you cannot collect pandemic unemployment assistance (PUA) while also drawing “payroll” funds during the “covered period” of your PPP loan, which can be as short as 8 weeks. You need to determine which federal relief program (PPP or PUA or both if smartly staggered) is best suited for your business needs. 

Coming soon: Americans for the Arts/Arts Action Fund will be hosting (TBD) a webinar on SVO grants. In the meantime, I presented an SVOG webinar yesterday for the North American Performing Arts Manager and Agents and I’m happy to share with you, my SVOG slide deckThe Arts Action Fund posts all COVID-19 economic resources and breaking news at Remember, you can always join me for Zoom Office Hours with Nina every Friday (tomorrow) at 11:00am ET to answer your specific COVID relief questions one-on-one. 

Stay safe and stay tuned for more.

Nina Ozlu Tunceli
Executive Director

To read all Arts Action Fund updates, visit COVID-19 Arts Federal Policy Updates & Action Alerts