*Not Legal Advice*
As of Sat. March 11th, 10am PT
Last updated: 3/12/23 3:30pm PT
LATEST AS OF 3/12/23 3:30pm PT: Feds Announce All Depositors Have Access to All Funds Monday
Liquidity for Payroll Wed
Other Strategies for Making Payroll Wed
Educational Resources
Template Lending Documents (Open-Sourced)
With the number of companies and VCs reaching out asking about developments related to SVB, especially related to the upcoming Wednesday payroll date, here is a collated set of resources and information. None of this is confidential or proprietary information that was shared, but is from publicly available sources.
Note these are for resources only and should not be construed as legal advice, endorsement, PR, official company policy, or advertisement - they may be out of date. This is a rapidly developing situation and many answers will likely be updated by regulators and parties by Monday. If anything is incorrect, accidentally mis-represented, or has been updated, feel free to comment.
The goal of this document is simply to collate in one place what is out there as it relates to the immediate need of most startup companies: running payroll for employees on Wed.
This is a community, open-source resource only based on others’ inputs. This is not a PR document nor does it necessarily reflect the official policies of any of the companies mentioned. It’s meant as a helpful starting resource only, of any/all available avenues towards the primary short-term goal of getting startup ecosystem employees paid.
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Liquidity for Payroll Wed
Q: First thing’s first: how do we get enough liquid funds to make payroll by Wednesday?
- FDIC insured deposits up to $250k should be available Monday morning.
- Advanced dividends from remaining non-insured holdings will be likely be paid out this week - even as early as Monday/Tuesday - in an amount from 30-80%. All of this is unconfirmed and these funds may or may not land in time for running Wednesday’s payroll.
- Some understand that any wires that went out of SVB accounts before the time that receivership took effect will still be going out and landing Monday/Tuesday. This is unconfirmed and TBD. Most recent update here: https://twitter.com/elatable/status/1634687611058163712
- Any custodial accounts held with SVB (but with a custodian such as US Bank, Goldman, Black Rock, etc.) should be available but you need to work directly with that custodian to gain access to those funds, and those teams and customer service lines are understandably very impacted right now.
- Currently unclear how SVB credit cards handled by third party providers (Mastercard, etc.) are being treated [<-- if you have any updates on this, please note here]
Loan Providers:
- Other possible funding opportunities to bridge payroll:
- Arc is offering short term credit facilities / bridge loans (up to $250k or current cash position) to help founders make payroll and other working capital needs. https://www.arc.tech/payroll
- Brex is offering short-term liquidity
- Capchase is offering emergency funding to fund payroll
- The understanding/rumor is that they will be offering to purchase receivership certificates, possibly as early as next week. Check out their website where any updates are likely to be made - here
- Viking Global - Structured Capital
- Minimum loan: $5M
- Company must have $30M+in revenue
- Term: 3 months to 2 years (depending on liquidation process)
- Contact: Link here
- Nitra is providing expedited underwriting for new credit lines and bridge loans outside healthcare - up to $200k on we card and more on a bridge loan.
- https://www.nitra.com/svb-support
- Uncapped emergency funding
- Uncapped has also launched an emergency funding programme to support founders impacted. To receive more information, you can email svb-support@weareuncapped.com. You should include the following in the email: Short-term funding requirement; Latest financials; Last 3 months' bank statements; Total balance at SVB
- They are looking to provide the funding as early as next week — up to $500k by Wednesday and up to $3m by next week
- Provides emergency funding for e-commerce and retail companies affected by SVB
- More info HERE
- Offering deferred payments, stable limits, and flexible payment terms detailed here.
- Tapline short term funding
- Tapline is also not impacted by SVB and remains capable of providing funding to SaaS companies impacted by the fallout. You can find more information here or reaching out directly to dean@tapline.io.
- Tranch is offering credit lines to help minimize the impact of recent events on operational spend up to $500k to pay supplier invoices including EOR
- https://tranch.com/suppliers/svb
- AngelList’s new product is designed to help impacted startups to get temporary loans from investors with online signing and funding. Lifeline Agreement will also have built-in banking access (if the company needs it). “Lifeline Agreement will include a promissory note with a standard interest rate (7 per cent) for a short-term loan from your investors lending enough to meet urgent needs. Online signing process with a single link to share and works with AngelList Banking or any bank,” Sumukh Sridhara, Founder Products Lead at AngelList said in a tweet. Lifeline agreement is currently available to startups for free.
- Outside of SVB issues they share that they offer 48-hour turnaround in short term capital, but maxed to $250k or so - link here
- Non-dilutive funding using data as collateral - more info here
- Marketplace for finding funding sources, with an SVB landing page announcement - more info here
- OnDeck small business loans - more info here
- Credibly - small business loans, some of which claim to be available same-day
- Marketplace to compare lending options
- States “get funding fast” but no specific landing page for SVB-impacted businesses so unclear if funds would hit in time for running payroll
- More info here
- Funding for ecommerce companies only
- Connect your store account (Amazon, Shopify, etc.) and based on prior 6 months revenue can provide working capital
- More info here
- Revenue-based capital
- Unclear whether timing would make it by Wed’s payroll
- More info here
- Growth capital, $1M - $7M
- No specific landing page to assist SVB-impacted companies
- Describes as capital “within 4 weeks” so likely NOT an option for Wed’s payroll but possibly other mid-term liquidity needs
- More info here
- Revenue-based financing for SaaS companies
- Unclear if any specific assistance or urgent programs for SVB-impacted customers as there is no SVB-impact landing page
- More info here
- SMall business loans up to $250k
- States you can “move money into your account as soon as tomorrow”
- No specific landing page for SVB impacted companies
- More info here
- Up to $150k for first-time borrowers
- Unclear timing re: Wed’s payroll, no landing page specific to SVB impacted companies
- More info here
- Non-dilutive capital, must have at least $250k MRR
- Describes itself as a 6-8 week process; not helpful for Wed’s payroll but depending on how events unfold, possible helpful for mid-term capital issues
- More info here
- Described as “fas-capital” but no specific SVB landing page so unclear if fast enough for Wed’s payroll
- More info here
SAFE/Bridge Financing (Investors)
- Short-term bridge SAFEs or Convertible Notes by existing investors, on template documents (there are templates floating around for SAFEs, bridge-notes, and convertible notes) See open-sourced templates linked below.
- A number of VCs have announced low-interest bridge loans to their portfolio companies in order to make payroll. Ask your investors for bridge funding first and foremost as you may get a lower-interest rate loan than other commercially available sources. You likely need money from them to land in your non-SVB account by Tues am at the latest in order to run payroll for Wed.
Bridge Funding - Payroll Companies
- Funding from your payroll company
- ADP: There is a rumor (rumor only) that ADP may be providing short-term one-time payroll loans for next week. Reach out to them if you run payroll w/ SVB on ADP.
- Remote: Remote founder has announced that they will cover March 15th payroll run for all companies (even those on SVB themselves as a company) via announcement on Linkedin
Other Strategies for Making Payroll Wed
Q: What other things can I do to try and make payroll on Wednesday?
- Reach out to your payroll company and ask for a one-time exception to be able to send payroll out by 3pm, 4pm, 5pm on Tuesday in time for Wed’s payroll run. Typically the deadline is sooner but given the extraordinary circumstances they may be likely to be giving one-time exemptions.
- Some payroll companies provide next-day payroll. Check your payroll company.
- Re: Gusto:
- Until you have a new bank account, you will need to fund the payrolls you run with a manual wire. To do that: Run the payroll, see instructions for wiring funds, and make the wire from your non-SVB bank.
- When you update your details in Gusto to a non-SVB bank, things will return to usual automated funding. Updated announcement with more details here.
- Some customers have had luck contacting support and/or assurances@gusto.com to be allowed to select/have their settings changed to next-day payroll if you are otherwise an SVB customer who is trying to p.m. now link a new, non-SVB account that you are hoping to run payroll with (via the next-day 5pm Tues cut-off). If you don’t already have next-day payroll setup you may be able to contact support to enable it if you need the extra time until ~5pm Tuesday for funds to otherwise hit your non-SVB account.
- If you are being blocked from running payroll because you’re a startup and you only have an SVB bank account, consider alternative to spin up a new bank account:
- Regional banks / smaller banks will be easier to set up a new business account more quickly and typically have shorter KYC requirement timelines and requirements – try this over the weekend and/or Monday first thing am
- Last resort is to have you and your board authorize a temporary transfer to the CEO’s account (or other trusted individual account or trust account) so that that bank account can be linked to send out payroll → not ideal, but a last resort if all of your banking is on SVB and you aren’t able to open a new account in time
- Community suggestion: you may ask your outside counsel if they would accept funds to their trust account to then process payroll; before doing so check that they would be able to make the short-timeframes needed to sign any documentation, connect and verify accounts, and disburse funds, particularly given that funds disbursements is typically outside the scope of their competencies and risk profile. Have not heard of examples of this being on offer, or being an option anyone is considering [COMMENT HERE IF YOU’VE HEARD OF ANY FIRMS OFFERING THIS OR COMPANIES DOING THIS]
- Community suggestion: if you have a brokerage account already set up in Carta you may be able to leverage this brokerage accounts for inbound/outbound wires if you don’t already have a bank account alternative to SVB [IF YOU HAVE THOUGHTS ABOUT DOING/NOT DOING THIS - COMMENT HERE]
- If you are in the good position to be able to have funds in another (non SVB) account in time, prepare your finance team on the possibility that the company needs to be ready to wire funds to individual employees on Wed. IF you are on a payroll company that otherwise relies on SVB and is in jeopardy of not being able to process in time (your payroll company should be communicating with you if this is the case)
- Account for add’l wire fees you will incur, and the fact that some of these wires will likely be incorrect - when doing this many by hand there will be some fails that you may not be able to recover funds from
- As a last resort, consider being ready to send checks out on Wed. In most jdxns (not confirmed - everyone should do your own research) if you in good faith think you have the funds but can’t get bank accounts linked to payroll software in time, prep to print checks and offer employees to pick them up in person or make mailings. Checks generally have to be mailed as of payroll date to be deemed compliant.
- Recommendations for Banks with quick or same-day setup for new account openings:
- Quick temporary solution:
- Some companies are using their Carta brokerage account (if they already had one) to send money/in out - see note about on trust accounts
- [ANY FURTHER RECOMMENDATIONS COMMENT HERE]
Educational Resources
Recorded Webinar / Resources that are out there:
Template Lending Docs (Open-Sourced):