SBA letters demand venues return millions in SVOG funds
The US Small Business Administration (SBA) has sent hundreds of rescission letters that demand venues return millions in SVOG funds.
The funds were part of $16.25 billion in SBA Shuttered Venue Operating Grants (SVOG) awarded in 2021 aimed at helping closed music venues and companies during the pandemic.
Recipients of the letter may also appeal the decision. So far, the SBA has not commented on the letters.
Bandit Lites founder Michael Strickland, who with NIVA, NITO and others helped push through the SVOG legislation, told Pollstar that he had heard from 200 business owners who had received the letter. Estimates of the total recipients range around 600 venues and related businesses.
“Years later, some grantees are receiving letters stating their award is being retroactively rescinded, sometimes for documentation the SBA previously reviewed and approved.” said music industry attorney Chris Castle. “Others are told their business ‘never qualified,’ despite having operated openly and transparently throughout the process…. This whiplash approach raises due process concerns and undermines trust in federal grantmaking.”
Bruce Houghton
SBA letters demand venues return millions in SVOG funds
Here’s more from Chris Castle from his Music Technology Policy blog (republished with permission) along with advice on how anyone who received an SBA SVOG rescission letter should respond.
In a stunning and frustrating, yet somehow typical, turn for the live events community, venue operators across the country are reporting receipt of SVOG rescission letters—demanding the return of grants awarded under the Small Business Administration’s Shuttered Venue Operators Grant program during the COVID pandemic. Many of these letters come months or even years after funds were received and spent, leaving small businesses scrambling for answers. This is exceptionally frustrating for me as I had to raise hell at the time about how long it was taking to loosen up the money as did the venues, Austin Congressman Roger Williams and NIVA.
A Brief History of SVOG
The Save Our Stages/SVOG program was established by Congress as part of the COVID-19 relief effort in late 2020 under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, later expanded by the American Rescue Plan Act of 2021. Administered by the SBA, SVOG was designed to provide emergency relief to independent live venues, theaters, promoters, and talent representatives devastated by pandemic shutdowns.
More than $14 billion was allocated, and recipients were required to meet strict eligibility guidelines—submitting tax records, programming histories, lease documents, and payroll records. The process was intensive and time-consuming, but for many, the grant provided a lifeline.
Now, the Rules Are Shifting
Years later, some grantees are receiving letters stating their award is being retroactively rescinded, sometimes for documentation the SBA previously reviewed and approved. Others are told their business “never qualified,” despite having operated openly and transparently throughout the process.
This whiplash approach raises due process concerns and undermines trust in federal grantmaking. But what options remain for those caught in this bureaucratic reversal?
Seek Legal Advice and Preserve All Options
If you’ve received a rescission letter and believe the decision is incorrect or unfair, seek qualified legal counsel immediately. A lawyer familiar with federal grant programs can help you evaluate your situation, identify any inconsistencies in the SBA’s actions, and explore formal appeal procedures.
You may also want to preserve all your rights by:
– Submitting a formal written response to the rescission
– Filing a timely appeal through the SBA’s designated process
– Maintaining a complete copy of your original application and all correspondence
– Consulting with industry associations or nonprofit advisors who assisted during the SVOG application phase
SVOG grants were administered under extraordinary circumstances with evolving guidance and timelines. If you complied in good faith, you deserve clarity and fair treatment. Legal guidance can help ensure you don’t waive your rights inadvertently.
Consider the SBA Office of the National Ombudsman
In addition to formal legal appeals, consider bringing your case to the SBA Office of the National Ombudsman.
This free service exists to assist small businesses experiencing unfair, burdensome, or inconsistent treatment by federal agencies–including the SBA itself. While the Ombudsman cannot overturn decisions, they can review your case, elevate it within the agency, and flag systemic problems to Congress. It’s a valuable oversight mechanism that should not be overlooked. These guys were a huge help to us when we were fighting the orphan works legislation many years ago and brought in lawyers and economists to help kill that legislation. Remember, they have a direct line to the Senate Small Business & Entrepreneurship Committee. They get the MTP seal of approval.
Here’s what you can do:
– Visit: Ombudsman website
– File: Use Form 1993 to describe how the rescission has harmed your business
– Explain: Include key facts about your award, your documentation, and any communications you had with SBA program officers and email to ombudsman@sba.gov
– Parallel Track: This is not a substitute for appealing within SBA—but it is a powerful parallel pressure point
Why This Matters
Many of the rescission letters seem to reflect moving goalposts or post hoc eligibility interpretations. That’s not how emergency aid is supposed to work. When federal grant administrators change the rules after funds have been disbursed and spent, they jeopardize the livelihoods of the very businesses Congress intended to protect with Save Our Stages.
The live events sector was one of the hardest-hit industries during COVID-19, and SVOG was one of its only lifelines. If the SBA is backtracking on commitments, affected venues should not only appeal internally—but raise their voices to Congress and the SBA Ombudsman.
And remember–the wheels of justice may turn slowly, but they do turn. Particularly if you help them along. Never stop fighting til the fight is done
It’s beyond cruel for the SBA to approve funding on forthright applications with full transparency for four years only to claw it back with a 30-day demand letter. Our government shut our events down for nearly two years, we rebuilt with aid intended for the hardest hit small businesses. They read the application, two people for up to four hours, then another person approved or denied. We sat thru zooms asking questions. Spoke to SBA legal council. We filed tax returns and made four years of business and personal financial decisions with no warming the covid rug would be pulled out on us again. And, just 30 days to resolve it with notice sent the Friday before a national holiday. SBA should help build businesses, not destroy them when they shut down to save lives.