Learn actionable strategies for capitalizing on post collapse opportunities. Take away a client communication strategy and resources for Business Owners and Bank CFOs to use when communicating with your clients regarding the Silicon Valley Bank collapse.
Content Summary: This post describes opportunities and actionable steps to capitalize on the opportunities created by the Silicon Valley Bank collapse for Business Owners and Bank CFOs. It also provides resources for your affected clients and a communication strategy, with examples, for discussing these opportunities with your clients.
No matter who you are if you were directly affected by the Silicon Valley Bank collapse we express our concern for you, wish you a positive outcome, and invite you to read on to find out how to make some lemonade out of this big yellow one.
Business Owners. It has been quite a week. Take a breath. Poise your mind on opportunity. Take action. Call us at (858) 358-6604 to crystalize your capital financing strategy and capitalize on the opportunities created by the SVB failure. Schedule an appointment to discuss your circumstances with Ian here.
Bank CFOs. Get in front of potential future litigation risk by justifying your enforcement of equity linked loan covenants with an independent equity valuation from IKT Business Valuations. Call us at (858) 358-6604 to start identifying revenue opportunities and start mitigating litigation risk.
What Resources Will Help My Affected Clients To Do Something If They Have Been Impacted By The SVB Closure?
For Your Clients
See the regulatory filing here, https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/DFPI-Orders-Silicon-Valley-Bank-03102023.pdf?emrc=bedc09 . If you had a deposit, a loan, or if you are owed money for a product or service provided by SVB visit the FDIC resource page here, https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/silicon-valley.html . To determine whether or not your bank is a California state chartered bank like SVB search the CA DFPI state chartered bank list here, https://dfpi.ca.gov/commercial-banks/directory-of-state-charted-com-banks/.
What Can You Do For Your Business Or Lending Institution?
For Business Owners and Bank CFOs
Business Owners. If you are a business owner it is time to review your going forward capital financing strategy. IKT Business Valuations can help you assess your existing capital strategy including your debt structure and identify alternative lending sources. Contact us to reduce your risk and optimize your capital strategy.
If you own a business you have a golden opportunity to learn the true nature of your current banking relationship. If you have not already received a communication from your bank regarding the SVB event it is time to consider a new banking relationship.
Bank CFOs. If you are a bank CFO or leader at any lending organization that relies on equity values in your lending terms it is time for a third party valuation of those values. IKT Business Valuations can provide expert valuation of your institutions equity linked loan agreements so you can clearly demonstrate justification for triggering rate changes, loan amount limits, and other existing custom lending terms.
Your Next Steps
Business Owners. It has been quite a week. Take a breath. Poise your mind on opportunity. Take action. Crystalize your capital financing strategy and capitalize on the opportunities created by the SVB failure. Schedule an appointment to discuss your circumstances with us here.
Bank CFOs. Get in front of potential future litigation risk by justifying your enforcement of equity linked loan covenants with an independent equity valuation from IKT Business Valuations. Start identifying revenue opportunities and start mitigating litigation risk.
A Brief Description Of What Happens When A Bank Goes Into Receivership
For Your Clients
When a bank goes into receivership, it means that a regulatory authority, such as the Federal Deposit Insurance Corporation (FDIC) in the United States, has taken control of the bank's assets and operations. This is typically done in order to protect depositors and prevent the bank from failing.
The process of receivership typically involves the appointment of a receiver, who is responsible for managing the bank's assets and operations. The receiver may be a government agency or a private entity, depending on the specific circumstances.
Once the bank is in receivership, the receiver will typically take steps to liquidate its assets and pay off its debts. This may involve selling off loans, foreclosing on properties, and selling off any other assets that the bank holds. The receiver will use the proceeds from these sales to pay off any outstanding debts, including deposits held by the bank's customers.
In some cases, the receiver may be able to find a buyer for the bank, either as a whole or in parts. If a buyer is found, the bank may be sold and continue to operate under new ownership. However, if no buyer can be found, the bank may be liquidated and its operations permanently shut down.
Throughout the process of receivership, depositors and other stakeholders will be kept informed of the status of the bank and any actions being taken by the receiver. Customers with insured deposits are typically protected by deposit insurance, which ensures that they will receive their deposits up to a certain amount even if the bank fails.
Why Should Your Clients Care That SVB Was Shuttered?
For Your Clients
Why should I care that SVB went down? We should all care when a major bank goes under but why you should care depends on who you are. Consider the position of Bank CFOs, Investors, Business Owner/Operators, and Financial Industry Regulators.
Bank CFOs. Bank CFOs care because they see opportunity for increased margins and market share.
Investors. Investors care because they see the risk of a cascade of company failures for those companies who currently rely on debt issued by SVB.
Business Owner/Operators. Think of a web application provider, like Salesforce.com, going offline because their Amazon Web Service autopayment never happened as a result of their SVB line of credit connected to that AWS autopayment becoming inaccessible. I am assuming Salesforce has better internal financial controls than “blame autopay” for a scenario like this but just picture a 404 ERROR when you visit their site and it paints the picture.
Financial Regulators care because they see panic and start halting trading in shares of major banks and financial institutions. Interrupted trading can impact share prices which are woven into the terms of many companies existing operating capital loans putting pressure on their ability to continue to access capital at the same rates and with the same loan amount limits they enjoyed before SVB went belly up. Higher operating capital loan rates and lower loan amount limits could mean cost cutting, project terminations, and employee terminations.