NATL. (AP) — From winemakers in California to startups across the Atlantic Ocean, companies are scrambling to figure out how to manage their finances after the Silicon Valley Bank was suddenly shut down on Friday.
The shutdown means distress not only for the business owners but also for their employees whose paychecks may be tired up in the chaos.
California Gov. Gavin Newsom said Saturday that he’s talking with the White House to help “stabilize the situation as quickly as possible, to protect jobs, people’s livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy.”
U.S. customers with less than $250,000 in the bank can count on insurance provided by the Federal Deposit Insurance Corp.
Regulators are trying to find a buyer for the bank in hopes customers with more than $250,000 can be made whole.
It’s not just startups feeling the pain. The bank’s collapse is having an effect on an important California industry: fine wines.
Winemaker Jasmine Hirsch said the disappearance of this bank is absolutely going to have an effect on the wine industry, especially in an environment where interest rates have gone up.
Martín Varsavsky, an Argentinian entrepreneur who has investments across the tech industry and Silicon Valley said, "the U.S. government needs to act more quickly to stanch further damage."
One of his companies, Overture Life, employs about 50 people, and had some $1.5 million in deposits in the bank but can rely on other holdings elsewhere to meet payroll requirements.
However, other companies have high percentages of their cash in Silicon Valley Bank, and they need access to more than the amount protected by the FDIC.