Silicon Valley Bank’s(SVB) sudden closure is having a profound impact on businesses, from winemakers in California to tech startups in the UK. As the bank was responsible for providing loans and credit to many businesses, its collapse has left many struggling to manage their finances, and many workers may not receive their paychecks on time.

Regulators are trying to find a buyer for the bank, so customers can receive the money they had on deposit, and the Bank of England has promised to pay out eligible depositors as soon as possible. In this blog post, we’ll explore the impact of Silicon Valley Bank’s closure on businesses worldwide, and how some businesses are adapting to the situation.

Silicon Valley Bank’s (SVB) failure shakes companies worldwide

Silicon Valley Bank was known for providing loans and credit to startups, including many in the cryptocurrency industry. Circle, a leading player in the cryptocurrency industry, revealed that it had about $3.3 billion of the roughly $40 billion in reserves for its USDC coin at SVB. The value of the USD Coin fell briefly below $0.87 on Saturday, from its usual $1.00, causing concern among cryptocurrency investors. The bank’s closure has left many businesses struggling to manage their finances, with some struggling to pay their employees.

Also Read : 7 Lessons learnt from SVB crises

The impact of the bank’s closure has been felt across the Atlantic too, with UK startups waking up to find that Silicon Valley Bank’s UK business would no longer be accepting deposits or making payments. The Bank of England has promised to pay out eligible depositors up to £170,000 ($204,544) for joint accounts “as quickly as possible.” Startup companies in the UK have expressed concern and panic, with the bank’s collapse affecting many businesses in the UK ecosystem who had significant exposure to Silicon Valley Bank UK.

Read More   Investor Confidence Soars as $40 Billion Floods into Equities - S&P 500's Strongest November Since 1980

Also Read : What action SVB depositors should take?

Silicon Valley Bank has also been an influential lender to vineyards in California since the 1990s. Winemaker Jasmine Hirsch, the general manager of Hirsch Vineyards in California’s Sonoma County, said that the bank’s disappearance would have an impact on the wine industry, especially in an environment where interest rates have gone up. While she expects her business to be fine, she worries about the broader effects for smaller vintners who rely on the bank to get lines of credit to plant new vines.

The bank’s closure has forced many businesses to scramble to find alternative sources of funding. Stefan Kalb, the CEO of Shelf Engine, a startup that helps grocers manage their food orders, said that he has every single penny of his company’s money in Silicon Valley Bank. He is filing a claim for the $250,000 limit, but that won’t be enough to keep paying Shelf Engine’s 40 employees for long. He may have to furlough employees until the bank’s closure is sorted out. Co-founder and CEO of tech startup Co:Create, Tara Fung, said that her firm uses multiple banks besides Silicon Valley Bank so was able to switch over its payroll and vendor payments to another bank on Friday.

Conclusion of SVB effects on World Business

Silicon Valley Bank’s sudden closure has had a profound impact on businesses worldwide, causing distress not only for businesses but also for their workers whose paychecks may get tied up in the chaos. Regulators are trying to find a buyer for the bank so that customers can receive their money back, and the Bank of England has promised to pay out eligible depositors as soon as possible. The bank’s collapse has left many businesses scrambling to find alternative sources of funding, with some struggling to pay their employees. The situation serves as a reminder of the importance of having multiple banks as partners and the need for businesses to be prepared for sudden changes in their banking relationships.

Read More   5 Mistakes Commonly Made by Beginners in the Stock Market?
What Happens to Deposits at Silicon Valley Bank? Silicon Valley Bank’s Closure Impacted Businesses Worldwide Elon Musk shows interest in acquiring SVB Bank Is Congress Waiting For Market Crash For Raising Debt Ceiling