Watch Silicon Valley Bank: Start-ups, small businesses and online sellers despair at frozen funds – Latest News
It’s not just large tech firms and venture capital funds caught up in the collapse of Silicon Valley Bank. There are numerous small businesses, kitchen table start-ups and side-hustle online retailers impacted by the sudden bank failure.
They range from business owners unable to pay employees to Etsy sellers worried about paying bills as online payments stalled.
Many have taken to social media to vent their frustrations.
Lindsey Michaelides, CEO of Strongsuit and a mother of four, has been left in limbo regarding the future of her business.
Having learned of the precarious situation of her bank on Thursday, she transferred all of her funds to a different bank except $250,000 (the insured limit) to cover expenses and pay for her 15-person staff.
The wire transfers were not processed and her money was frozen. Ms Michaelides took to Twitter to share her story.
“The collapse of SVB might look like a 1% problem that only impacts the coastal-tech-elite. Not true,” she wrote.
“This impacts small businesses made up of hard-working people making modest mortgage payments in the Midwest. This impacts parents putting dinner on the table.”
Ms Michaelides despairs that she does not know how this ends and the financial future of Strongsuit, her team, and her family are now at risk.
“I know that my story and the stories of thousands like me that have been impacted by SVB’s collapse do not match the current narrative,” she posted. “I don’t know the tech-elite. I do know hundreds of founders and early-stage employees risking their personal financial health and well-being to build something great. They work constantly, obsessively even, with the hope of making a dent in the world.”
Other home entrepreneurs found that the online marketplace Etsy failed to make expected payouts to sellers as the company used SVB to facilitate disbursements.
Etsy contacted those affected and said it is working with other payment partners to issue deposits, but many users were already in distress, relying on payouts to pay bills, buy groceries, and make mortgage payments.
The company has confirmed to DailyMail.com that delayed payments should be with sellers by Tuesday.
A spokesperson said: “At Etsy, supporting our sellers is our highest priority, and we understand how important it is for these small businesses to be able to receive their funds when they need them.
“We recently experienced a delay in issuing payments to a small group of sellers related to the unexpected collapse of Silicon Valley Bank — approximately 0.5 per cent of our active seller base had their payments delayed on Friday.
“We are working to pay these sellers today and we’ve already started processing payments via another payment partner this morning.”
E-commerce platform Shopify also had to reassure customers and take steps to ensure they were fully funded if money was frozen at SVB.
CEO Tobi Lutke tweeted out an email sent out to the platform’s online merchants and clarified that there had been a very minor impact for the firm but otherwise it was business as usual.
On Monday morning, President Joe Biden reassured Americans that the nation’s banking system is safe after Silicon Valley Bank collapsed last week and said there would be accountability for financial executives.
The president’s actions come after the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation announced on Sunday evening that depositors for Silicon Valley Bank would have access to their money on Monday.
“No losses — and this is an important point — no losses will be borne by the taxpayers,” the president said. “Instead the money will come from the fees that banks pay into the deposit insurance fund.”