SVB's programmatic payment systems are back online
Latest up here: https://www.moderntreasury.com/svb-resource-center
Prior HN thread: https://news.ycombinator.com/item?id=35113496
Prior HN thread: https://news.ycombinator.com/item?id=35113496
Given Mercury was a more popular contender, I'm going to bet they had an inflow of basically double-digit billions.
The logical move is to go bigger eg JPM.
Seems like services like this should be more popular.
The problem here is one of fiscal immaturity at startups. SVB offered ICS accounts but from what I'm seeing few startups put their money into them. My bet is that startups mature enough to have a proper CFO weren't as impacted by this mess.
was it incompetence or greed?
Presumably there's a cap for a reason, and presumably it's to protect ordinary Americans who rarely have $250K in assets, and not rich people who can literally afford to lose that much and still be rich.
otherwise 1/12th of your deposits would be the /best case scenario/ not the worst case.. it comes down to the details of how they balance the balances.
As long as your accounts are under the limits, there's no need to re-balance on outflow, just ensure you remain under the insurance limits at inflow
(That said, said service to split your eggs up doesn't need to be Mercury - they're just the VC-backed startup darling here. There's plenty of other banks that offer these services.).
There is still risk of interest rates rising significantly higher, but with 3 months treasure notes the downside is limited.
edit: typoed
I.e. don’t be SVB. Hire a risk officer.
Eh, how much does BofA or Chase pay on deposits? Interest rates have gone up, so they might hit 0.05% now?
It gave them the opportunity to make the mistakes they made. It didn't cause them. If you have more deposits than you can responsibly invest, you cut your rates until you can.
They offer treasury accounts that you can move money to and buy securities if you want yield.
So I don't think they have too much risk as far as interest on deposits. But what worries me, as a small business owner that has been using and loving Mercury for a few years now is that they offer free domestic and international wire transfers and I worry that they might start charging for that. It is the first bank I have had that did free international wires and I actually use that frequently. My last bank charged $85 and I literally had to fax a signed form to them to get it done.
The thing I don't know is if there is a per transaction fee that the banks pay. I assumed that there is and that Mercury was just eating the cost as a marketing expense.
We'll obviously open a new account eventually but it doesn't seem urgent?
Now, whether the FDIC should make this a declared policy position remains to be seen, but I believe that would require congressional action.
Operating a business and having employees is a huge responsibility. If people are depending on you to manage the risk of your business so they can buy groceries it's important to take that as seriously as you can.
It's likely not possible to open an account at another bank, wire all our money from SVB to there, and then wire the money to Gusto by 11am on Wednesday. So in the interest of ensuring employees are paid, the fastest option will likely be using SVB.
You're right that operating with two bank accounts now sounds like a good idea. We actually have that already because our structure involves a US parent corporation and a UK subsidiary, but the second bank account is in the UK (thankfully not with SVB UK, although ironically that's because we dragged our feet on moving to it).
Glad to hear you're focusing on getting that money flowing through to your employees.
Sorry you're in this situation. I know how frustrating it can be when you have to enter a reactive state that takes your attention away from your core mission.
Also, Brex isn't a bank. They make this very clear: https://www.brex.com/support/is-brex-cash-a-bank-account
You should read carefully for anything where you put your hard-earned money.
"Brex Cash is not a bank account; it is a cash management account offered by Brex Treasury (a FINRA-registered broker-dealer) that functions very much like a business bank account.
You can use your Brex Cash account to securely deposit checks (including via mobile app); send and receive payments via ACH, check, and wire—even internationally; and manage spend for your company’s different users.
Brex Cash also allows you to choose how your money is stored. You can elect to keep your deposits at a Brex partner bank, and if you do, you’ll be eligible for FDIC insurance up to $2,250,000 in total. The other option is to invest your deposits into a government money market mutual fund. You can also use any combination of these two options.
No matter how you choose to store your funds, your Brex account gives you unlimited corporate credit cards for secure, convenient spending. The cards are automatically paid daily like a debit card—while giving you cash back on every purchase and building your business credit.
Note: Unlike debit cards, Brex cards cannot be used to make cash deposits or ATM withdrawals."
Your FDIC insurance and exposure is entirely up to you at Brex.
I agree with others that you should be diversifying over the medium/long term, but I wouldn’t be racing to do that today.
Except for that you can't log into their website, they don't pick up their phones or answer their emails, etc.
I would recommend not YOLOing your money into multiple accounts today - rushed decisions are what got us here. If your immediate payroll issue is sorted, spend today and tomorrow working on a diversification and treasury plan with your team, then execute that over the next week or two. At this point, poorly configured wire transfers and scams are much more of a risk than your SVB balance going away.
This is a mostly fully functional bank designed to help smooth the transition for depositors away from SVB to their new permanent homes.
*
To clarify — If you have not yet updated your bank account on file to another (see article), you will have to wire funds to Gusto in order to make payroll on time. Log in to the app, run payroll, and you’ll get a prompt with more details and the specific cut-off, but it’s usually 10am PST in the morning of payroll.
In terms, of getting a new bank set up, I’ve seen people open bank accounts same-day with Mercury (online) or Chase (walking into a branch). Wiring funds from SVB to one of these banks should take <24hr to complete.
But yes, you CAN initiate a wire transfer from SVB if you prefer to do that. Note that some SVB customers are seeing issues with the portal right now (probably given high traffic).
Hope this helps.
Oh, also we created this resource hub to help SVB customers with tips like the above: https://gusto.com/company-news/silicon-valley-bank-closure-r...
Silicon Valley Bank, N.A. rising from the ashes of SVB...can gusto update now please.
Why the hell would they want a different bank than the one being run by the US government?
The whole point of the herculean effort of a all-deposits-protected federal takeover is to prevent disruption of this kind by providing the firmest possible guarantees.
In terms, of getting a new bank set up, I’ve seen people open bank accounts same-day with Mercury (online) or Chase (walking into a branch). Wiring funds from SVB to one of these banks should take <24hr to complete.
But yes, you CAN initiate a wire transfer from SVB if you prefer to do that. Note that some SVB customers are seeing issues with the portal right now (probably given high traffic).
Hope this helps.
Oh, also we created this resource hub to help SVB customers with tips like the above: https://gusto.com/company-news/silicon-valley-bank-closure-r...
Since the ACH payment is scheduled for tonight, we were planning on seeing if it fails, and if it does, sending the wire tomorrow so it arrives by 11am on Wednesday as required.
I also agree with the other commenter downthread that this is adding an unnecessary layer of complexity, but I understand why you might be doing it to avoid overdrawing an account that has been emptied. Still, I'm not sure this default opt-out is the best solution - maybe it would be better to ask those who did move money out of SVB to cancel their ACH schedule, rather than unilaterally ceasing ACH processing and asking those who didn't move money out of SVB to change their method of payment.
I work at a mid-size company (~550 employees) run by accountants. Their leadership and handling of the company is fantastic.