100 or fewer organisations will benefit from the next round of England's Culture Recovery Fund repayable finance.
The second round of Culture Recovery Fund (CRF) repayable finance will provide loans of at least £1m.
Organisations in England can apply for funding to cover core operations until March 2022 regardless of whether they have already recieved emergency grants.
The pot of £100m means it's likely fewer than 100 organisations will benefit, although Arts Council England (ACE) says it "can't pre-empt success rates as we don't know how many organisations will apply for, or how much". The funder has refused to release success rates for other CRF rounds until all funding has been allocated.
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ACE says the new round of loans aim to ensure that "by 31 March 2022, successful applicants are operating fully on a viable and sustainable basis".
"We do not expect this funding to be used to experiment, research or develop new work that is not directly essential to your organisation remaining financially viable."
Supply a plan
Loan applicants must set out a full reopening plan based on assumptions about the spread of Covid-19 and possible restrictions in England, which DCMS is yet to provide.
Timelines are tight: applications are due by midday January 7, with first stage decisions expected at the end of January and applications for a "competitive" second stage due on February 3.
Success at stage two depends on demonstrating urgent need for finance, as well as "credible, cost-effective plans" to return the organisation to financial sustainability in a viable way, regardless of the public health context.
By viable, "we mean any costs that offer good value for money and do not entail significant financial risk," ACE says.
"It does not mean you must take the cheapest approach at all times, but any approach you take must not entail significantly greater costs than the cheapest approach."
Third-party financial advisors will conduct "rigorous" checks on these plans, which must include key business development milestone, three years of financial statements, and annual budgets and cashflow forecasts through to 2026.
The stage two assessment will consider the risk of organisations defaulting on their loans and applicants will be asked to identify what, if any, security they can offer to the government.
On the criteria
As with other CRF rounds, applications will be assessed against three criteria: cultural significance, diversity of audiences and workforce, and financial sustainability.
While applications not deemed culturally significant will not progress to stage two, applicants that score 'not met' on diversity measures may still be approved, but will be required to produce a "satisfactory" diversity action plan.
The weight given to the financial viability criterion is less clear. It will be assessed against additional balancing criteria to fund a geographically and artistically diverse pool of organisations and improve access to culture across England.
Local authorities can apply, but will have to show they exhausted other avenues of funding.
Libraries, performing and visual arts schools, and unaccredited museums are ineligible.
More grants coming
Applications for a new round of grants worth £300m will open in the new year.
Guidance from ACE sets out a total CRF grant cap of £3m per non-profit organisations and £1m for commercial outfits. This means an organisation that has already received £500,000, for example, would only be eligible for another £2.5m or £500,000, depending on its profitability.
If your organisation requires more than £3m, "you should consider whether applying for repayable finance is a more appropriate route for you," the guidance says.