Outrage as SBA continues to withhold funds from music venues

It was more than a month ago that 5 Mag suggested out that music venue owners might actually reopen at full capacity before the Small Business Administration sent them the funds Congress intended to help them stay afloat.

That has actually happened.

The SBA’s stewardship of the Shuttered Venue Operators Grants (SVOG) — more than $16 billion intended to support America’s small and independent venues — has come under withering criticism as the agency disclosed they had thus far approved just 90 grants to the more than 14,000 applicants. This represents a funding rate of just 0.6% some six months after Congress approved the funds and charged the SBA with administering grants to small and independent venue operators.

Just 90 applications have been approved and several music venue operators found the agency had not just destroyed their business, but actually declared them dead.

The New York Times is reporting this afternoon that the turmoil has lead to the leadership of the SBA’s Shuttered Venue Operator Grant program being purged.

“The Small Business Administration has essentially ousted the leaders of a deeply troubled $16 billion relief effort for live-events businesses,” the Times reports today, “bringing in a new team to take over and fix the program.”

As 5 Mag wrote all the way back in April 2021, the previous team had wasted most of the first four months of 2021 building a custom website and composing 10 FAQs for applicants consisting of more than 260 questions, the latest of which consisted of 41 pages and 20,000 words. All of this was done before the agency had accepted a single application from venue operators.

That website lasted all of 4 hours and 15 minutes before crashing on the first day the application process was opened and stayed inoperable for more than two weeks. When the website was re-opened in late April, the SBA claimed they would be prioritizing venues that “needed the help the most.” Instead, just 90 applications have been approved and several music venue operators found the agency had not just destroyed their business but actually declared them dead.

“I am in disbelief,” Arizona Congressman Greg Stanton wrote SBA administrator Isabella Casillas Guzman in a letter dated June 9, “that nearly six months after the $16.2 billion Shuttered Venue Operator Grant was signed into law, the Small Business Administration reports that it has approved a mere 90 grants to the more than 14,000 businesses and organizations that have applied.”

Stanton, a Democrat representing Maricopa County, called the SBA’s rollout and execution of the SVOG program “a disaster” and pointed out only a single venue in his home state had received aid.

“Please tell me,” Stanton wrote. “What are my constitutuents – on the verge of closing their businesses forever – supposed to do? What can I tell them to explain why the SBA can’t get it together?”

The SBA had set a June 9 deadline to disperse funds to businesses that had lost more than 90% of their business during the pandemic. The SBA also planned to get started distributing grants to businesses in the next tier — those who had lost 70% or more — by the same date. The SBA missed the deadlines entirely.

It’s not clear if this lead to yesterday’s purge (or more likely a “gentle reassignment”) of the SVOG’s leadership. However the Times reports that the agency was “shifting the program’s leadership to a group of employees from its Office of Capital Access, which coordinated the $800 billion Paycheck Protection Program and the $29 billion Restaurant Revitalization Fund.”

The Small Business Administration has essentially ousted the leaders of a deeply troubled $16 billion relief effort for live-events businesses, bringing in a new team to take over and fix the program. https://t.co/FEnHJcgiO8

— DealBook (@dealbook) June 10, 2021

It’s hard to believe a program could be managed this badly, though it’s important to remember that the “Small Business Administration” has a reputation of doing little for “small” businesses and administers very little in general. The SBA’s handling of Paycheck Protection Program funds essentially consisted of acting as a middleman between the US Treasury and private banks, who in turn dispersed the funds to businesses.

SVOG’s funds, to be absolutely clear, have already been approved by Congress. The $16.25 billion — described as the “largest investment in the arts in US history” — is sitting in a government bank account, where it has been for more than six months, waiting while the SBA dithers.