Many businesses are now struggling to pay their employees.
On Friday, March 10, regulators ordered the closure of the 16th largest bank in the U.S. — Silicon Valley Bank (SIVB) – Get Free Report.
Also Read– Pandemic Recovery Grant Programs Launch Additional Funding Rounds
The bank was known for working mostly with up-and-coming tech companies. But now that the bank has crashed, several companies have raised alarm bells and shared their losses due to the bank crash.
“All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023,” the FDIC said in a statement. Insured deposits cover anything under $250,000 — but some companies had much more than that in SVB accounts.
“The FDIC will pay uninsured depositors an advance dividend within the next week,” the statement also assured. But in the meantime, some companies have said that they can’t make payroll.
Read More:- SVB Collapse: Small Businesses Caught Up in Bank Closure
Roku (ROKU) – Get Free Report said in a filing that 26% of its company’s money, approximately $487 million, was held by SVB. In the filing, the company said that “the Company’s deposits with SVB are largely uninsured.” As for a path forward Roku is unsure, “to what extent the company will be able to recover its cash on deposit at SVB.”
Etsy (ETSY) – Get Free Report sellers have been notified that they won’t be receiving their regular sales deposits due to the collapse. The online retail platform says that it’s “working with our other payment partners to issue [sellers’] deposit[s] as soon as possible.”
Also Read– How to handle small business insurance claims
Roblox (RBLX) – Get Free Report released a statement saying that SVB held 5% of its company’s money–something like $150 million. The online gaming platform said the bank’s circumstances will “have no impact” on the company’s operations.
Also Read- Should Your Business Launch an NFT? Here Are 4 Things You Need to Know.
The fall of SVB also had an effect on the cryptocurrency sector. Digital asset lender BlockFi had $227 million worth of unprotected funds with the bank. Crypto firm Circle announced in a tweet that SVB held a whopping $3.3 billion it had invested with the bank.
News publisher Vox Media reportedly had a “substantial” amount of money tied up with SVB. The company did say, however, that it doesn’t anticipate any disruption to everyday functions.
Also Read– Small Businesses Lost 61,000 Jobs in February
Lesser-known businesses like the toy company Camp, DC-based Compass Coffee, Rippling payroll services, and more are reporting losses due to the bank’s collapse. Clothing subscription box service Stitch Fix (SFIX) – Get Free Report has said that its $40 million SVB credit line would be unavailable. The loan is part of a $100 million credit agreement from three lenders, including SVB, alongside JPMorgan Chase and Citibank.
