In July 2025, we wrote that the Small Business Administration (SBA) had begun issuing letters to recipients of grant funds under the $16.25 Billion COVID-era Shuttered Venue Operators Grant (SVOG) program, rescinding grant recipients’ eligibility for the program and demanding full or partial repayment of the grants years after award. SBA gave grantees 30 days to file an appeal. SBA continued issuing rescission letters to grantees through at least October 2025, including to grantees whose SVOG awards had been fully closed out. After months of silence, SBA is now issuing new letters to some grantees seeking yet more documents and information to support their eligibility. However, SBA’s requests deviate from the statutory program eligibility requirements, seemingly imposing brand new conditions on grant recipients to prove eligibility based on criteria never previously disclosed. Grant recipients under the SVOG program who receive supplemental document and information requests from SBA should take the requests seriously, provide available documentary support (even if already provided), and advance both factual and legal arguments to demonstrate eligibility.
As SVOG awardees know, applicants were required to submit voluminous information and documentation as part of the application process. And many grantees were required to answer additional questions and submit additional documents as part of SBA’s “continued monitoring” of awards. Grantees uploaded even more information and documentation as part of the rescission appeals process, usually with a cover letter explaining why grantees were eligible for the SVOG program at the time of their application. But SBA still isn’t satisfied. Recently, it began sending letters to grantees who filed rescission appeals asking for them to produce still more documentation, often seeking categories of information it never asked for previously or which have no relationship with the statutory eligibility criteria. Complicating matters, SBA is demanding that grantees produce those documents within 10 calendar days.
What Grantees Should Do:
- Check the SVOG Portal Regularly. SBA’s requests for additional information and documents are delivered through grant recipients’ SVOG portal accounts. While, typically, recipients will receive email notifications that a portal action item has been opened, some recipients are reporting that portal notifications are landing in their spam folders. Given the short turnaround time SBA is providing for responses to the information and document requests, grantees should check their portals for updates multiple times per week to ensure notifications are not missed.
- Respond Promptly. If you are a grantee who appealed SBA’s rescission and you receive a letter from SBA demanding additional documentation, it is critical that you respond within the 10-day time limit or seek an extension of time from SBA for your response. Although these letters are not a denial of a grantee’s appeal, they indicate that SBA is not yet convinced that a grantee has demonstrated eligibility for the program and is continuing to seek a basis to justify its decision to rescind a grantee’s SVOG award.
- Take the Requests Seriously. In some respects, SBA’s letters request information requested (and received) during the continuing monitoring process. In some instances, documents have been produced many times over by grantees. Nevertheless, as noted above, SBA still is not convinced. Grantees should not respond to the information requests with comments such as “information already provided” or “see previously produced documents.” Such responses will give SBA ample reason to deny any appeal. Instead, grantees should provide narrative responses, documentary backup, and any new, supplemental, or additional information available to justify eligibility.
- SBA’s Requests Appear to Impose New Obligations or Eligibility Criteria on Grantees. SBA’s document requests deviate from the requirements of the SVOG statute, implying that SBA is imposing new (or incorrect) eligibility criteria for grantees during the appeal process. By way of one example, SBA has requested that some theatrical producers provide evidence that the company “has [a] profit . . . interest in theatrical production[s].” Other grantees have been asked to provide that the grantee has “an investment at risk” with respect to live performances. But these items are not required for eligibility under the SVOG statute. Rather, the statute deems a live venue operator or promoter, theatrical producer, or live performance arts organization operator eligible for an SVOG award if it “organizes, promotes, produces, manages, or hosts live concerts, comedy shows, theatrical productions, or other events by performing artists. . . .” Congress did not require that grantees have a profit interest or investment at risk in a live performance in order to maintain program eligibility. Grantees receiving letters from SBA should point out that SBA cannot impose eligibility requirements that deviate from those written by Congress in the SVOG statute. Further, with respect to information SBA has never before requested from SVOG recipients, grantees should note that, in many cases, grantees’ obligation to preserve documents related to the SVOG program has long since expired, and requesting new documentation is unfair, arbitrary, and capricious.
- Seek Competent Counsel. Grantees who receive a new document demand from SBA should retain competent counsel familiar with the SVOG program and SBA’s rescission efforts, even if they did not have an attorney when they submitted their appeal. While producing even more documentation to SBA strains small businesses’ limited resources, SBA’s demand also presents an opportunity for a grantee to supplement the record and potentially bolster arguments in any future litigation. The fact that SBA is requesting additional information before rendering a decision on SVOG appeals means that SBA appears willing to fully vet grantee eligibility before finalizing its rescission decision. It is imperative that grantees provide as much documentation, factual evidence, and legal argument as possible to put the grantee in the best possible position to successfully appeal the rescission decision.
- Even an Adverse Appeal Decision Can be Further Appealed. Although SBA has not yet provided much information about next steps after SBA has decided the present appeals, SBA has indicated that a further appeal, likely to the SBA Office of Hearings and Appeals (OHA), will be available to grantees who are unsuccessful in the initial appeal process. In an OHA appeal, an independent Administrative Law Judge decides whether a grantee demonstrated eligibility through a review of the entire administrative record. Grantees receiving denials of their appeals should consider further appeals to this neutral judge to ensure statutory requirements are imposed on grantees equally and fairly.
PilieroMazza’s SVOG team stands ready to guide you in preparing legal and factual responses to SBA’s new assertions and demands. If you have any questions about SBA’s SVOG rescission initiative and potential impacts on your business, please contact Matt Feinberg or Paul Allulis, the authors of this blog, or another member of the Firm’s Litigation & Dispute Resolution Group.
