The recent events with Silicon Valley Bank (SVB) have affected business owners on multiple levels. While the initial reaction for many was "Thank goodness I don't bank there!"... new concerns are arising. We want to give you just a few simple things to think about to give you more confidence in your cash.
Lesson #1 - If you have more than $250,000 in a single bank, it's time to look at options. While SVB account owners ended up being fully covered, that may not be the case in the future. There are often options within the same bank. Give your banker (or us) a call if you want to discuss this.
Lesson #2 - Even if you don't have more than $250,000, it's always good to have money at a different bank. Many reasons can temporarily disrupt your access to cash, not all of them as severely as a bank run and/or closure, but they can be quite disruptive.
Lesson #3 - Your vendors and customers may use a bank that has issues. Be prepared with cash reserves in case your payments from customers are delayed. Communicate with your vendors if they are at a bank that is affected to see if they have an alternative method of payment. Also, be prepared to make payment another way if your payment portal is affected.
There's a great podcast geared toward accountants but in language that all business owners can understand. They discuss the impact on business owners. There's also a page created to look at the apps you use and see if they are affected. See the list here.
There is a lot more to learn and we're happy to talk further! Don’t hesitate to reach out.
