CRITICAL INFO REGARDING BANKING RISKS
An Update on Silicon Valley Bank: Steps you can take to protect your business in this environment
As you may know, on Friday, March 10, 2023, Silicon Valley Bank (SVB) was shut down and placed into receivership.
We strongly advise all Blue Fox clients, subscribers, and friends to ensure that the balance held at your bank(s) is at or below the FDIC-insured limits. The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
Steps to Protect Your Business!
[ The following guidance is provided by our trusted advisor and PEO Company, JustWorks ]
Even if you do not bank with SVB, here are some things for you to think about. Some of these may be seen as general best practices, but they also reflect what we’ve learned as we’ve helped impacted customers navigate the current SVB situation.
Have Multiple Banking Partners - If you only have one corporate banking partner, consider opening a second account with another bank as a redundancy for funding critical operations before you need it. Businesses with a backup account with another institution are able to fund their next payroll and create certainty for their teams.
Establish Sources of Emergency Funding - If you have investors, speak to them about the SVB situation. If a similar situation were to happen to your banking partner(s), talk about the role these investors might be able to play in helping you to bridge payroll to get to the other side. Again, this is something that companies impacted by the SVB situation are working through in real-time. The SVB situation happened extremely fast and having an emergency funding plan in place creates certainty for you and your business.
Communicate - In any situation impacting payroll, the stress can be high. Have a communications plan ready for your employees. Communicate early, often, and honestly. Let people know what is going on. Even if you miss the employee pay date—you can process off cycle once you gain access to funds. Remember there’s still an obligation to pay your employees in a timely manner—certain states may impose penalties on your company for late wage payments.
