What Happened with the Silicon Valley Bank Collapse?
Silicon Valley Bank collapsed last Friday following an announcement that they would sell their securities at a loss and sell $2.25 billion in shares to bridge the gap, which prompted a bank run.
SVB was known for being a large player in the tech startup, venture capital, and life science industries, and had many large companies as clients like Roku, Roblox, Rocket Lab USA, and Stich Fix. The Wall Street Journal reported that Roku had approximately $487 million held at SVB, and Reuters reported that Stich Fix anticipated that their $40 million credit line with SVB would not be available.
The Biden administration, Treasury Reserve, and Federal Reserve announced emergency measures on Sunday, saying they would guarantee all depositors with money at SVB loans for 100% of their SVB funds for up to one year without using taxpayer dollars.
The bank failure is being felt globally and is being dealt with in various ways. For example, HSBC bought the UK arm of SVB for £1 (one British pound) in a rescue deal.
This story continues to develop, so check updated resources around the web for details.
Can We Predict How the SVB Collapse Will Play Out with Other Banks in the Coming Days?
This has been the largest bank collapse in the US since 2008, though many financial institutions are urging people not to panic, saying it does not seem to be a systemic issue for the economy.
However, it is important to note this event as a cautionary tale for all parties, even if your funds are not impacted by SVB.
Diversifying your accounts across multiple banks could help if more banks are impacted, now or in the future.
Seeking various capital sources outside of traditional financial institutions can help, too, such as alternative funding or private capital loans if needed. At Innovative Capital, we can connect your business with the capital source it needs.
Alternative Funding Sources for Your Business
Our team at Innovative Capital has a wide variety of connections and resources for business funding – helpful if you want or need to diversify your funds in creative ways that do not always have to involve traditional banks.
For example, one alternative method we can utilize is P2P lending, which allows borrowers to access loans at competitive rates and with flexible repayment terms. This direct connection removes the need for traditional financial institutions (like banks), allowing borrowers to access funding at lower interest rates.
We offer a wide variety of commercial loans and private capital options, and work with a large number of lenders through our high quality network and winning team.
Get in touch with us for your capital needs and one of our team members will get back to you shortly.